Alright, let’s get realistic here, cryptocurrency growth this year has been very disappointing. I mean, after what we saw in December and early January -Bitcoin nearing $ 20, 000 and Ethereum hitting $1,000 – what we are seeing now is just pathetic. Bitcoin is still struggling to cross $ 6,500. Then there’s Ethereum which is also struggling to cross a mere $250, a feat it did with ease some 10 months ago. This year was expected to be the year of the “bull” for the crypto market, but of unfortunately it’s been nothing short of bearish.
This month itself too has been very bad for bitcoin in particular. After Goldman Sachs announced they were going to hold on for a while to plans of their own crypto trading desk. The news apparently hurt the feelings of many wannabe crypto traders who were banking on the financial giant’s trust in cryptocurrency.
We have definitely seen the crypto market experience severe volatility; however, this stretch seems pretty much like a dead end at least for this year. That doesn’t rule out the fact that Goldman Sachs had a hand in this plummet for bitcoin. The bright side of the seemingly gloomy narrative is that with most companies gravitating towards blockchain technology, a mainstream adoption of cryptocurrencies would be an equal and corresponding action. This is largely due to blockchain and cryptocurrency’s almost inseparable bond.
The market has seen Bitcoin gain about $36 in the past 24 hours going into the weekend, and we expect to see it continue climbing over the period. The great and saddening pessimistic view of the market by most analysts suggests that the market may not experience the crazy growth we saw last year’s end. Some even say we shouldn’t expect Bitcoin to cross $9,000 till the year ends.
How Do Bitcoin Prices Rise Or Drop?
Not to get all geeky on this, Bitcoin’s value works on the basic economic principles of demand and supply. The more active users and their transactions, the more demand rises. Moreover, since the cap on bitcoin is nearly reaching its limit (80% of bitcoins have been mined) many people aren’t really looking towards the supply sector anymore.
For a larger section of the past, Bitcoin values rose by some news headlines. What do we mean by this? The moment people hear that some major upgrade is coming to the cryptocurrency community, everyone rushes in there to make an investment. Supposing the SEC approves a Bitcoin ETF today, we will see a spike in bitcoin price values. In the same vein, when there is a form of bad news like China bans bitcoin trading we should expect to see the value of Bitcoin head towards the south of the graph.
More proof of this can be seen from the last quarter of this past year when all the media was talking about Bitcoin and cryptocurrency at large. During that period, we saw the most substantial increment in crypto value like never before. This could happen in this year anyway but judging by how the media has been reacting to crypto lately there is great and justifiable doubt that cryptos may not be able to see that massive increase in the latter part of this year. Not that cryptos cannot increase again this year – charts of the last three years prove exponential increase is very likely – it’s just that crypto may not fly as much as they did last year.
What the market needs now is a lot of education for upcoming crypto enthusiasts who are ready to invest long-term and not short-term, because these short-term investors kill the life in crypto much more than any other thing.
Featured Image of Dollar via CCN.
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