Should you buy Bitcoin now?

Ross Greenwood speaks to Lasanka Perera, from Independent Reserve, a Bitcoin exchange, about Bitcoin continuing to tumble with a dramatic fall today, dipping to US$6,145.

Introduction: Should you buy Bitcoin now?

Ross Greenwood: Great to have your company here on Money News right around the country. Well, it wasn’t just stock markets and the Australian dollar that were falling today, it was also Bitcoin. Bear in mind, go back a year, the price of Bitcoin at that time was under $1,000 U.S. By November 8 last year, Bitcoin had gone beyond $7,000 U.S.,

but then in the space of just over a month, Bitcoin went bonkers. It went from $7,000 U.S. to $19,343. That was its peak on December 16 last year.

Since then, the price of Bitcoin has come off, but as the financial markets have fallen in the past few days, so too has Bitcoin. Which now is sitting $6,145 U.S. In fact, at one stage, it got below $6,000. A man who’s always been great with his analysis of Bitcoin for us. A director at Independent Reserve, a Bitcoin exchange. Lasanka Perera is on the line. Many thanks for your time, Lasanka.

Interview with: Lasanka Perera, Independent Reserve

Lasanka Perera: Thank you, Ross.

Ross Greenwood:  It’s often said that what goes up and goes up very quickly needs to come down. Is that the case with Bitcoin?

Lasanka Perera:  Absolutely, Ross. It’s been quite a day here. Fear, uncertainty and doubt is truly taking grip of our market.

Ross Greenwood:  Do you think it’s really about what’s happening in the financial markets around the world? Or is it also what’s happening with Bitcoin itself, with clearly controls now playing placed upon the trading of Bitcoins in places such as China, in Korea and even in the United States. The Senate there was thinking about ways that they might better regulate the asset class. What do you believe it is?

Lasanka Perera:  I think Ross, we had quite a feverish run-up through Christmas and the early part of January. I think some part of it is that we’re having a bit of a correction from that. That’s been exacerbated by a number of news items like China and Facebook are banning crypto ads and things like that. The fear machine is really have been doing its work. There’s also been a number of announcements from regulators around the world that have moved to tighten regulations around the crypto industry.

Ross Greenwood:  As I understand it, Lasanka, trying to buy Bitcoins is sometimes difficult enough. Because you’ve obviously got to get into the blockchain. Trying to sell can be often quite difficult. You’ve got to go through quite a few hoops before you can sell your Bitcoin or your portion of a Bitcoin. What’s it been like for people who’ve been trying to get their profits out over the past few days?

Lasanka Perera:  This is why we set up Independent Reserve in Australia, Ross. For Aussies to be able to buy and sell easier. In terms of Australia and Independent Reserve, we enable customers to liquidate their crypto holdings and we pay the amount in AUD using EFT. In Australia, it’s quite easy, but I can understand if you’re an Australian customer, you’re dealing with offshore exchanges, that part might be quite difficult.

Ross Greenwood:  What do you think drives Bitcoin? Is it actually the supply and demand or is it really now something that’s to do with all financial markets? We can see shares falling. We can see currencies falling. We can see commodities falling. Is it just a natural thing that Bitcoin would fall as well?

Lasanka Perera:  I think one has fed the other. I actually, to tell you the truth, I think that the sell-off in Bitcoin started a little bit before what you saw in the equities market and the Aussie dollar as well. I think the fundamental value drivers behind Bitcoin, Ross, have never been stronger, but I do say the fact that the herd mentality really took over around December and we’ve really seen a run-up. We’re just kind of coming back to some normal levels.

Ross Greenwood:  It’s going to be interesting to watch. Lasanka Perera, the director at Independent Reserve which is a Bitcoin exchange here in Australia. He’s always been great with his time analyzing that. Lasanka, I appreciate your time this evening.

Lasanka Perera:  Thanks, Ross.

Ross Greenwood:  It’s been one hell of a run, I can tell you that.

 

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Image source: 2GB

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