In a street survey conducted by MarketWatch’s Saumya Vaishampayan on how much the common man is aware of bitcoin, the digital currency, some of the comments make for interesting reading:
“A currency of no country in particular – everything in the future”
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“You can do shady stuff on the Internet with it”
“Not backed up by something real like gold”
“Not something that I would use as a currency”
Clearly, bitcoin is viewed rather negatively by the average American. In addition, it appears that the common man is ignorant of bitcoin’s status as a leading cryptocurrency; even, possibly, what the latter term really means.
Recent developments in bitcoin-land have not helped. Premium bitcoin exchange Mt. Gox folded up in February after it found that it had mysteriously lost 850,000 bitcoins, presumably stolen by hackers who exploited security loopholes in bitcoin software. Though the company later traced 200,000 of the missing bitcoins, it still could not avert bankruptcy.
Measured in US dollars, bitcoin traded today at $485.90 as shown in the chart above sourced from WinkDex, a bitcoin index launched by the Winklevoss twins.
Earlier this month, bitcoin plunged below the psychological $400 level when it touched a low of $369 (see the yellow highlighted area), nearly a third of the lofty high of $1155 it touched in December 2013.
Bitcoin is clearly in a bear grip, though it has corrected somewhat off the above low.
Summing up, bitcoin is plagued by ignorance and suspicion on the streets, and apathy and depreciation in its own market.
Does that make for a buying opportunity?
Bitcoin and sentiment
Here is an interesting chart that was tweeted by Sentdex last month. It explores bitcoin’s sentiment analysis graph along with its US dollar price.
Note how, in the gold shaded area, the price was moving up and off its bottom (diverging) even while sentiment was plunging in the wake of the Mt. Gox flameout.
In the green shaded area, note how the price took off once the market perceived that a bottom had probably been called.
At today’s price, bitcoin is still nearly 60% off its high of $1155.
On longer-term basis, that is still a lot of negative sentiment. However, courageous investors with some “can-lose” money could consider taking at least a partial bet on bitcoin at these levels.