Ah, bitcoin. We celebrate its highs with dreams of private jets, and mourn its dramatic falls with a silent, “I hope this isn’t proof that the bubble crowd can tell the future.”
For those of us who’ve been invested in bitcoin for a while, it can sometimes be a painful experience looking at our wallet history—what was worth so very many dollars just a short few months ago, now sits at much less than its former, supposedly unstoppable climb.
While this has been the source of much panic and anxious sleepless nights for investors new to crypto, veteran investors knew what goes up may well need to come down, but it’s deadset sure to fly skywards again.
Now that everyone’s favorite pioneering cryptocurrency is back to a healthy US$9,608 at the time of writing (from its gut-wrenching low of US$6,000 on February 6), we asked the industry for their opinion about bitcoin’s recent slump.
I think the dip is likely related to credit card companies en masse deciding they wouldn’t let customers buy crypto with their cards; also, perhaps, the rise in transaction fees. The steep drop was due to speculators fleeing. There is a theory that bitcoin prices are correlated with the likelihood of a bitcoin to be held rather than exchanged—that would imply an upward curve over time. If the price of bitcoin is determined by the chances that a bitcoin is spent rather than saved, once bitcoin becomes widely used as currency rather than a store of value, it becomes a “hot potato” where people are just swapping bitcoin back and forth— something that won’t cause a price increase. There is a researcher, Alexander Hirner, who’s extended this model to argue that increased use of bitcoin transactionally will, in fact, make the price go down. His argument is that lots of people using bitcoin means that there will be fewer “stagnant” bitcoin causing an overall price drop. He has some equations that back it up. Then again, it could all just be because of Tether.
You’ll see another bounce once US tax returns get done between now and April. Then you’ll see another bump/dip in the spring. In general, at the end of Q2, BTC will be stable around US$15k then jump to US$26k by end of Q4, as the US economy slips into recession, driven down by whatever Trump is Trumping, debt ceiling, Brexit and Student loans. #2018Recession
Read Invest in Blockchain’s interview with Samson Williams.
LinkedIn blockchain influencer and crypto blogger Robby Schwertner:
Some people I had contact with, non-blockchainers, were picking on me, saying they knew it would crash and how would I survive when everything slumped.
However, after the success of CryptoRobby on social media, there was now some kind of set-back and I felt a lot of “Schadenfreude”, a German expression with no real translation in English, best described as: Schaden = damage, Freude = joy. Maybe spitefulness, someone who is happy that others have faced some kind of damage.
Some folks said that blockchain will now completely die, citing Warren Buffett that cryptocurrencies will have a bad end.
Now the sun is shining again, the sky is clearing, everybody is happy, and … no critical voices. Interesting!
Bitcoin and cryptocurrencies are a bubble. Some ICOs will grow enormously big, yet even more will fail. But I am convinced that the dream of cryptocurrencies will not burst. Still, the next years will be very hard at times.
Read Invest in Blockchain’s interview with Robby Schwertner.
Did the value of Bitcoin go back up, or did the value of the dollar come back down? Something I always wonder when the prices start to climb. Maybe the meteoric rise in crypto prices over the past few years should be discussed as a meteoric crash of fiat prices.
ICO & blockchain advisor and crypto investor Igor Pauer:
I expect one more dip into the US$6-7k area.
Daryl Naidoo, a crypto/blockchain consultant and client acquisition manager for the Blockchain Advisory Council:
I have a feeling that there will be another dip in the US$7k area this year before it bounces back and breaks new record highs.
Blockchain evangelist and ICO advisor Sujeet Kumar:
I am buying Bitcoin at price level and I know it will cross much further than US$40K this year. I did not expect the crash, but again, it provided us the opportunity to buy more and more BTC.
Over to you! What’s your opinion on “What’s up with bitcoin?” Tell us in the comments below.