If you hold cryptocurrency, the chances are that these are trying times for you. However, how do you measure exactly what is happening? Is this the beginning of the end? Should you sell? Maybe this is a good time to buy crypto while it’s still cheap? And what to expect?
Like many frustrated investors tend to forget, the difference between jumping off a building and stock market prices falling, in the case with a market there are complex dynamics, and prices can go up as easily as they go down. Cryptocurrency seems to have taken a turn for the worse lately (growing in the last week nevertheless) leaving a few people empty-handed and frustrated. We, however, think that our long-term predictions were, in fact, correct and that the recent fall in prices is just the beginning of a new bullish cycle.
Below we list the reasons why we think this is a new cycle of growth of all things related to Bitcoin, Ethereum, and blockchain. Having studied the background, consulted market analytics, and assessed the infrastructure issues, we are sure you are likely to relate to the case we’re presenting.
Making educated guesses:
The market dynamics that govern the growth and regression of cryptocurrency grown are numerous, and they interconnect and influence each other. Even though market analysts use terms like “ a death cross” and “bear market”, which seem easy enough to understand at first, there is much more than meets the eye in the crypto world.
The ground rule certainly is to do the research before you start making far-reaching conclusions about where things are going next (but that is why you’re reading this). They key is finding sources that would be qualified enough to answer the question:
“This is not a currency in the accepted sense. There’s no central bank that stands behind it. For me, it’s much more like a commodity. This is not at a size where it’s a macroeconomic risk to the global economy, but when prices are moving like that, my view would be investors need to do their homework.”
— Sir Jon Cunliffe, Deputy Governor, Bank of England
Linda Butcher, one of the founders of Rewards Blockchain Ltd, believes Bitcoins is hitting a low before it springs back up:
“There are certainly stabilizing factors in this market that will ultimately influence prices. The substantial funds seem to be sitting on the sidelines waiting for the bottom.
I believe the market will start to respond as more public companies take cryptocurrency mainstream. These companies will be leaders in establishing blockchain as a lasting technology giving confidence to the global market and cryptocurrencies.”
The infrastructure issue
We are seeing a few major long-term perspectives for Bitcoins and blockchain, with large companies like Intel and Nvidia signing up to use the technology in their latest products as well as the industry giants like Facebook and Google. Jensen Huang, Nvidia’s CEO, describes blockchain in affectionate terms:
“Blockchain’s going to be here for a long time and it’s going to be a fundamentally new form of computing,” Huang declared in an interview. “I expect blockchain, I expect cryptocurrency to be an important driver for GPUs.”
The market, since it is rapidly expanding, is truly unstable, facing a wide array of scalability issues, especially in the last few months. With the technology that has created so many opportunities that the world’s infrastructure seemed to be unable to deal with so much voltage, the system in someу places is cracking at the seams.
The evidence that crypto technology may be too much for the world to handle at this point you would have seen in December with a number of exchanges halting transactions, unable to process so many requests.
The facts are there that at this point the lack of infrastructure was what caused Bitcoins to plummet, and when it gets rebuilt and the world is fully HD-ready there will be a rise in popularity the likes of which the world has not seen so far.
Saxo Bank’s Kay Van-Petersen, whom we have mentioned already a couple of times in our recent articles, is all for the cryptocurrency, although he is more fond of Ethereum:
“First off, you could argue we have had a proper correction in bitcoin, it has had a 50 percent pullback at one point, which is healthy. But we have still not seen the full effect of the futures contracts… “Ethereum came after bitcoin, it has a more unified leadership than bitcoin,” he said. “They seem to be a bit further along the way in regards to forming the solution to scaling issues. And you can see transactions on their side eclipses transactions across other cryptos.”
Julian Hosp, the president of TenX, is also enthusiastic about Bitcoin’s future, declaring:
“I think we’re going to see bitcoin hitting the $60,000 mark, but I also think we’re going to see bitcoin hitting the $5,000 mark. “
Hosp commented optimistically in his interview to the CNBC on the December price drop:
“For experts that have been in the market, this was actually a welcome dip. This dip for us was very, very healthy, and some of us have used it to buy a little bit more because suddenly we had 40-45 percent discount to all-time highs. “
Still, even given the fact that Bitcoin is a very volatile asset, the ado about its price fluctuation may not be as great as the press would have you believe for the lack of better evidence and cold, hard facts and figures.
After all, Bitcoin has seen (and survived) market downs which lasted almost half a year at a time if we’re talking bear markets, and it has come back stronger than ever to return to its December peak of near $20k. The key here is studying the history and cause-and-effect connections, which means understanding what’s to come.
Image courtesy of Promdevelop.
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