If you are worried about the recent crypto market corrections, rest assured that bitcoin value is still up by 729 percent from where it was a year ago. In fact, since its inception, bitcoin has gained nearly 70,328.57 percent, according to information published on bitcoin.com.
Bitcoin has gone through a series of corrections in the past years since its inception, but analysts believe in just a few notable deep cuts. Judging by the market plunge in the past five weeks, analysts urge investors to look at the cryptocurrency in three dimensions: its historical past, its present status, and the future projections. By looking at the historical view of bitcoin, it is easy to notice that the digital currency has witnessed not only a series of value drops but also substantial gains in the crypto space.
Mainstream Media Contribution
Following the lows experienced in the cryptocurrency market in the past few weeks, the mainstream media publications have run scary headlines on bitcoin value. The Wall Street Journal, New York Times, Business Insider and others have published stories on what they term as bitcoin crash and the death spiral of the cryptocurrency wave.
Since bitcoin value hit an all-time high of more than $19,000 per coin in December 2017, the currency has experienced a downward trend. Many predictions followed after, suggesting how low the cryptocurrency might fall steadily and stop at $10,000. As of this writing, Bitcoin value has fallen to a low of $7, 625. Many predictions still put the mainstream digital currency at a lower value in the near future.
Up from more than $19,000 last December to slightly below $8000, bitcoin value decreased by more than 60 percent. In the crypto space, such levels of volatility are expected, as analysts suggest that bitcoin markets are more likely to rebound.
Five-week Plunge Similar to a Few Outlier Corrections
Many people look at the past bitcoin corrections to determine where the present correction will lead regarding bitcoin value. Historically, bitcoin markets have witnessed a good number of big value drops. However, the recent plunge seems to overwhelm some four past corrections.
Bitcoin value reached its all-time high on December 16, 2017. From that time, the digital currency has lost more than 60 percent of its value in a period of five weeks. Even with the market rebound, the current dip outweighs that of June 2012, when bitcoin dipped 36 percent due to Linode hack scare. In addition, the decline in the past month outpaces the Mt Gox bankruptcy plunge in 2014, when bitcoin value dropped by 49 percent. During the Chinese exchange bans in 2017, the value dropped by 40 percent.
All the same, bitcoin has experienced three significant market outlier corrections, which were comparably larger than the recent drop. In 2011, the Japanese exchange Mt Gox experienced its first attack—and bitcoin value dipped 94 percent. In 2013, Mt Gox halted trading—and the value dropped by a further 79 percent. Finally, bitcoin experienced the longest ‘bear run’ in its history between 2013 and 2015, which saw the cryptocurrency lose 87 percent of its value.
Additionally, bitcoin has experienced other major market corrections above the 35 percent mark. Each of these corrections might have led the mainstream media to nail the final coffin on the casket of the digital currency.
Bitcoin far from ‘dead’
Judging from where bitcoin value was a year ago, the markets are still up by more than 700 percent. Analysts believe that for every two steps backward, bitcoin leaps seven steps forward. This comes almost after every major correction. It is, therefore, safe to say that with more than 70,000% growth since its inception, the bubble is far from bursting.
Could we witness the same scenario this time around? No one really knows what happens next in the crypto space, but analysts believe that cryptocurrencies never ‘die.’ Many analysts believe that the value of the crypto economy will rise in the long term. For the prophets of doom that believe the cryptocurrencies are breathing their last, they should look at the whole picture.
This leads to the next point:
Buy Low, Sell High
It has been a tense five weeks for bitcoin enthusiasts with the price of the cryptocurrency reaching an all-time high and then crash to irritating lows.
Speaking to CNBC in 2017, Wozniak said, “I remember getting interested in bitcoin some time ago…It was $70 for a bitcoin, man and I went online and you had to have a special bank account at a special bank and I couldn’t buy any bitcoin so I gave up. Eventually, I got some of them at the $700 stage…”
Ironically, Wozniak ended up selling his bitcoins because he could no longer ride the roller coaster. While he made a lot of money, his main aim of stepping out was not to make a profit.
“I had bitcoin to experiment with and when it shot up high, I said, ‘I don’t want to become one of those people that watch it and care about the number.’ I don’t want that kind of care in my life,” Wozniak told an audience at the Nordic Business Forum held in Sweden.
Saving yourself the heartache
By leaving the crypto roller coaster just at the right time, the inventor saved himself a lot of headaches. Recently, Bitcoin has been all over the place. Friday, February 2, the cryptocurrency traded at $7,695.10 on CoinDesk. This was the first time bitcoin value went below $8,000 mark since November 24, 2017.
Even so, bitcoin recorded a high of $19, 340 according to Coinbase figures. As for Wozniak, he did not want to handle the market swings.
“Part of my happiness is not to have worries, so I sold it all—just to get rid of it—except just enough to still experiment with,” Wozniak says, expressing his interest in using bitcoin to pay for things.
A formula for Happiness
Wozniak, a veteran engineer, designed his happiness formula at age 20. At that time, even before he became Apple co-founder he discovered that happiness in life is better than owning wealth, real estate, or yachts.
“If I died and had all this wealth and yachts and all this stuff, would I be as happy as when I laugh? And I thought about pranks I played and jokes I had and music I would hear that would make me smile, and I came up with my formula that life is about happiness,” he says.
By buying when bitcoin value is low and selling when it’s high, you can save yourself a lot of headaches and coin up your happiness formula.
Analysts’ predictions for 2018
In 2018, bitcoin value has taken a two-month dive, putting the cryptocurrency at a miserable start. However, investors and analysts have given their opinions on what they think about the future value of bitcoin.
According to express.co.uk, various predictions continue to emerge with both high and low projections. Despite the rocky start into 2018, it is not all bad news for bitcoin investors. At the beginning of the year, Spencer Bogart predicted that bitcoin value could reach $50,000 in 2018, more than double its highest value in 2017. Bogart believes that bitcoin will rise in value, based on the help from institutional investors.
Speaking to CNBC, Bogart said, “Institutional investors that want to play in this market, even if they do, they are going to wait a little bit and either dip their toes in the water or just wait on the sidelines until they see the products themselves function.”
Expressing his focus on bitcoin in 2018, Bogart says, “I can’t tell you exactly what’s going to happen with price and neither can anybody….But when I look out over the next 12 months, what I see is a significant supply and demand imbalance at the current price levels.”
Bitcoin will go mainstream in 2018
Meanwhile, Imran Wasim of AMSYS Group believes that bitcoin will go mainstream in 2018. Speaking to News BTC, the financial analyst added, “It has dropped in price, this is good. A lot of money is going to come into bitcoin; bitcoin will go up around $30,000-$35,000 this year—next couple of years? $100, 000.”
While exuding confidence that he has ‘no idea’ when the price could rise, Wasim added, “It is going to happen, because it is a store of value.”
However, not everybody is positive about this. David Garrity, CEO at GVA Research LLC, warned that bitcoin value might drop as low as $5000.
“Well, I’m just doing it more on a broad sense of seeing what the general levels from which there are actual moves over the last six months. Arguing to the extent, we had seen sort of this meteoric rise in the fourth quarter going on to almost $20,000 again,” said Garrity, when he spoke to Bloomberg on how to chart the meteoric rise of bitcoin.
All the same, considering the longer-term future of bitcoin, investors predict a bullish market. According to Shopin’s CEO Eran Eyal, bitcoin value is likely to hit $100,000 in the future.
“I have no doubt that bitcoin is going to reach well beyond $100,000…Have a look at how it climbed over the past. I think it’s important not to just look at it at this moment in time but also to look at it historically at what has happened around the world,” says Mr. Eyal.
Bitcoin for $1 million?
On the contrary, Bobby Lee of China’s BTCC believes that bitcoin value could rise even higher. Lee puts his prediction above $1 million dollars in the next twenty years. Addressing Express.co.uk during London Blockchain Week, the CEO of China’s first bitcoin exchange said, “Bitcoin, I think will get to $1 million per bitcoin. Right now it’s $10,000, it will go 100,000 and then 200,000, 500,000…Half a million, that’s going to be a milestone and then eventually it will cross $1 million for bitcoin.”
“Within 20 years, really within 20 years,” says Lee, on how long it will take bitcoin value to hit a million dollars.
Join the conversation over at Telegram (https://t.me/coinstaker)
Tony is a writer for the crypto space. He presents cryptocurrency and blockchain topics to the public in a way that he only can. While carefully researched, this article should not be taken as an express investment guide. Do your own research and consult a financial advisor before you invest in cryptocurrency.
Know more than others on any Blockchain Party!
Join more than 5000 others to receive the breaking news and weekly summaries! No ICO spam, we promise.