Bitcoin Retrospective and a Glance into the Future
2018 looks like a cross-section of the overall bitcoin behavior – unpredicted, volatile, giving big hopes and stealing them within a day. The currency started 2018 with a glorious entrance holding its price at the peak since the creation of cryptocurrencies.
However, already by February bitcoin market was on its knees begging for stability after an unexpected fall for almost 40%. This is how it opened the gates to the bearish trend. Unfortunately, it didn’t manage to break the pattern for the whole year. It had positive dynamics at the end of February and April but even such moments systematically ended in the red.
The majority expecting a bullish breakout got struck by the lighting of December, 4 when bitcoin’s price went below $4,000. Optimists say that it is still more compared to last summer while pessimists expect no Santa and get rid of the assets.
No one gives any guaranties, which is the most frustrating thing that could have ever happened to bitcoin. Nevertheless, before giving in to panic, let’s find some ground for reflecting.
What Influences Bitcoin
- Mass Media and Financial Influencers
Bitcoin adepts claim that the main benefit of the crypto world is its independence from geopolitical and microeconomic factors. Nevertheless, being part of the digital world bitcoin is hugely influenced by information attacks and opinions of investors, financial analytics and other respected personalities in the world of technology and trading.
Negative statements by Forbes or Bloomberg experts most likely make bitcoin fall as well as news about strict regulations and prohibition of cryptocurrencies in Asia, for example. Digital money needs some fresh air on the current mass media battlefield until then it is going to be weak and vulnerable.
- Hack Attacks
No return to uptrend is possible if a technological base of bitcoin doesn’t prove to be secure and stable. Simple numbers that made investors go frantic in 2018: CoinCheck - $500 million lost due to a hack in Japan; Coinrail - $40 million in South Korea.
The money was lost and the only answer to the torturing “why” question was a lack of talented and experienced developers. Imagine that these are the words of CoinCheck, the representatives the largest cryptocurrency exchange in Japan. The outrage among investors was quite a logical reaction.
However, after the accident, the security was claimed to be the main concern. The crypto exchange companies all over the worlds started to implement strict regulatory policies and create a consistent system of monitoring.
- Traders Interest
The higher the price, the more prestige and possible profit bitcoin promises to buyers. The more cryptocurrency market dives into the pool of stagnation, the lower is the interest and prices hit all the possible pessimistic levels.
What is Next?
Should you expect a strong bull run, give the bitcoin market time to mature or give up on hope?
Crypto adepts happen to be stubborn and confident. They continue selling their faith in the glorious future of bitcoin and altcoin. Even after the recent fall, they dream big predicting bitcoin to be around $20,000 in 2019. They explain this forecast by the Bitcoin ETF creation and its long-awaited acceptance by The United States Securities and Exchange Commission (SEC).
ETF is an Exchange-Traded Fund that will use bitcoin as its main asset. Investors will not have direct contact with digital money which gives reliable protection to their money. ETF promises to take all the responsibility for the customers’ insurance. It will definitely make cryptocurrencies more reliable and attractive for the community.
The deadline for ETF’s approval is the end of February. Though ETF promoters stay cautiously optimistic, the commissioner working with SEC cautions people that the process of approval can take a long time. However, she stresses that the institutionalization of crypto will inevitably occur.
Another good sign for the crypto world is the creation of “Mediterranean seven”- a group of 7 EU countries that agreed to encourage and promote the usage of blockchain technology. The association’s leaders are France and Malta. The latter is considered to be the most open-minded and forward-thinking country in terms of digital currencies and their flexible blockchain regulations.
Experts say that the involvement of Malta and acceptance of its authority can mean a lot for the future of crypto business in Europe. It will act as a guarantor of transparent blockchain ecosystem and friendly environment for startups.
Equally event for digital currencies is the recent G20. The world leaders and central bank governors agreed on a declaration that introduces a common desire to regulate the crypto sector. Though at the first glance this may seem like a limitation, if you give it a second thought delicate regulations together with cooperation can do cryptocurrencies only good. It will attract more trustworthy investors, be more secure and lead to the adoption of blockchain technology by larges enterprises.
Crypto Market Zen
The market of “digital gold” is definitely not for anxious and melancholic types of people. With its turbulent prices, doubtful analytic and no reliable sources for profit prediction trading can become a nightmare for the unprepared audiences.
Here is some advice on how to avoid stress if you have already joined the race.
Stop checking your apps at every price movement, even if the direction is downhill. Do not miss the bigger picture. People who were involved in a race from the very beginning saw the way bitcoin went from 1$ to $1000, back to $200 and then to $16,000. Jim Smigiel, CIO of absolute return strategies at SEI Investments, says: "Looking at something with such high volatility all the time is not conducive to an investor's mental health." If you want to go on trading at such a vibrant market, buy vitamins for balancing your nerves and try to think strategically.
Always remember that you live in the testing times of crypto investment. The periods of “nuclear winter” happen in cycles and the current trend will eventually come to an end.
As a popular twitter bitcoin ideologist, The Crypto Dog says:
There is no reason to expect Bitcoin to rapidly enter a bull market from the bottom, it will take time. This time presents an incredible opportunity to begin to average into a position for the next bull cycle.