The price of bitcoin has registered another flat week with a slight decline, as it opened the week at $378.64 and closed just four dollars down at $374.26 on 7th December.
The biggest intra-day swing was a one-day rally on 5th December that saw the price rise from a low of $365.68 to a high of $378.65, adding $18 over 24 hours.
While the price of bitcoin over the last two weeks has been flat, traders saw significantly more action in the earlier period, that is, the closing week of November. That week saw an intra-day swing of $35, or double the biggest swing of last week, despite the price closing just $1.85 higher over the seven days. This was supported by robust trading volume that fell just 2.4% compared to the previous period.
Among exchanges, the biggest drops in volume for the week were experienced by OKCoin, Bitfinex and Huobi. Exchanges that gained volume were ANXBTC, Localbitcoins and LakeBTC.
Regular readers may recall last week's Markets Weekly that highlighted Localbitcoins' apparent ascendancy among traders of US dollars and Russian rubles.
More analysis of the peer-to-peer marketplace for bitcoins was offered this week by sometime cryptocurrency analyst Tuur Demeester, who edits the Dutch financial newsletter MacroTrends. Demeester looked at LocalBitcoins trends among six currency pairs including the dollar, pound, euro and Australian dollar, and tweeted:
Localbitcoins sees strongest growth in highly regulated US, Australian markets pic.twitter.com/xCtZCvPxNk
Demeester's analysis found trading volume on the marketplace rising in the US and Australia – a change he says indicates that peer-to-peer bitcoin buying is growing in markets that are highly regulated.
Australia has imposed a value-added tax on buying bitcoins, which has been influential in at least one bitcoin startup leaving the country. The US remains in a state of regulatory uncertainty, while the New York 'BitLicense' is being prepared and politicians call for a debate on the appropriate regulatory framework for cryptocurrencies.
Politicians make the right noises
It's regulation, or perhaps the lack of it, for bitcoin that politicians on both sides of the Atlantic are discussing this week.
A member of the Parliament Treasury Select Committee, the legislative body that scrutinises the United Kingdom government's financial institutions, told the House of Commons that bitcoin doesn't need further rules. The committee member, Steve Baker, explained to CoinDesk that digital currencies could function perfectly well within existing laws, while more regulation threatens to strangle innovation.
Baker's view was echoed by another British politician, Chi Onwurah, who is a shadow cabinet minister with the opposition Labour party. Onwurah, speaking to CoinDesk two weeks ago, said it is too early to devise a regulatory framework for digital currencies, and besides, cryptocurrencies hold the potential to reduce the amount of power concentrated in the hands of big banks.
Onwurah's view appears to be shared by US congressman Steve Stockman, who submitted a bill to the legislative chamber asking for a moratorium on digital currency regulations at both state and federal levels for a five year period.
Stockman invoked Apple founder Steve Jobs' name in justifying the move, hypothesising that the technology visionary would never have gotten his company off the ground in the '80s if onerous regulations had been in his way.
USMS auction fails to affect price
The US government may not have settled on a legal framework for bitcoin at all levels yet, but it is clear on one thing: selling seized bitcoin assets for US dollars is perfectly legitimate. The US Marshalls Service completed its second auction of bitcoin from a seized stash belonging to Ross Ulbricht, the alleged Silk Road kingpin on 4th December.
Bidders were lukewarm about putting money on the table. The number of bids compared to the inaugural June auction of similarly seized coins fell by nearly 60%, while the number of registered bidders fell by three quarters.
The federal agency put 50,000 BTC on the block this time, up from the nearly 30,000 coins auctioned in the summer. The winner of all the coins in the first auction, Tim Draper, won just a small chunk of 2,000 coins this time.
The bitcoin price was unaffected by the latest USMS auction, trading in the $370s all week. In the build up to the first auction, the price rose gradually, but did not budge when Draper revealed himself to be the sole winner. It did, however, begin a steep decline weeks later.
However, all this news – positive or not – may matter little in the long run, according to the reliably bullish Martin Tillier of Nasdaq. Tillier poses the following question to his readers: if you had $375 to spend on a Christmas gift, would you put it in dollars that are guaranteed to gradually fall in value, or spend it on bitcoin?
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.