Posted: 23 October 2018
Bitcoin has no shortage of tales about tiny investments turning into multi-million dollar returns. Cryptocurrency had a moment, and many people thought that it might become the first universal form of currency.
Ideas of decentralized monetary systems, power to the people, and incredible return on investment were booming as they pertained to bitcoin. In the wake of such incredible hype, bitcoin seems to have lost a little buzz.
That being said, is bitcoin dead? We’ll dig into that idea and give you the latest on where the cryptocurrency stands.
Is Bitcoin Dead?
The value of bitcoin fell below the 6,000 dollar mark late last June. This stood in stark contrast to its value the previous December, reaching heights of 19,500 dollars. That’s somewhere around a 60 percent drop.
Because the currency is so new, this has led a lot of people to assume that the drop marks the demise of bitcoin. This isn’t true, and to prove this we need to look at normal market behavior.
Bear and Bull Markets
Bear and bull markets are different states of the same cycle. Some stocks remain steady, while some are subjected to intense ebbs and flows. Those which are more prone to intense changes show activity that falls into the “bear” or “bull” categories.
A bear market period is marked by low investor confidence. This happens to a market after a period of high confidence and growth. After a period of growth, the first sign of decline might trigger a few investors to pull out.
As investors sell their stocks, the value of the stock will continue to decrease. This process prompts more and more people to sell their stock, culminating at a point which the value of the stock is low.
In order to be considered a bear market, the value of the stock price must swing down 20 percent in the period of two months at most. At the stock’s lowest point, investors tend to see the opportunity to reinvest.
Getting in while the stock is low yields an opportunity to ride that stock all the way back up. The opposite process begins to happen. This is when investors have a field day with the stock as the value rises extremely fast. That activity describes a “bull market.”
Back to Bitcoin
Bitcoin is in a bear market. So, just because it appears as though bitcoin is dying, it’s just on the down-end of a very valuable teeter-totter. The freshness of the industry is also a reason for the current downturn in bitcoin value.
Cryptocurrency exists in new territory that humans still need to figure out. An anonymous form of currency is prime territory for a whole host of criminal activity.
It follows that it could take time to create a legal landscape for bitcoin to exist. Whenever new rules are set in place, holdbacks and momentary drops in value will follow.
Japanese financial regulators have set new rules in motion to restrict money laundering and other criminal activities. Whether these restrictions overstep their bounds or not is difficult to say, but it’s clear that they are a disincentive.
Restrictions will always take a little while for people to warm up to, meaning that there will be a temporary lull in bitcoin activity. Also, while the implementations are being made, Japan has stopped new accounts from being opened.
Even the announcement that this would happen caused a drop in bitcoin value. The morning that the news was announced, the value of bitcoin dropped over 300 dollars.
Reasons to Be Optimistic
The first thing that stands out is the fact that value usually shoots up after the low period of a bear market. In fact, there are many examples of stocks that rose higher than they had ever been after a bear market.
That means that right now could be one of the best times to invest in bitcoin. Value increases very fast in bull periods, so the opportunity to invest a significant amount and get incredible returns is one that might not be around for long.
Another important thing to consider is that the Japanese regulations are going to be better for the public in the long run. Few people benefit when criminal activity is easy and money is passed with little regulatory oversight.
Investor confidence will increase in the absence of things like hacking attacks. Additionally, things like money laundering will not be as easily achieved, and the industry will be more trusted and robust for the general public.
Most importantly, though:
Money Is Much Less of a Physical Thing Now
People are increasingly getting used to the idea of money being transferred via the internet. Almost everything can be bought and sold online, and money transferring sites have opened the floodgates for currency to be moved around online.
While this seems like an obvious thing, think about the state of things only 10 years ago. People, while they had access to services like Paypal, weren’t entirely open to the idea of using it.
The market is still new and largely untapped within the United States. People talk about bitcoin a lot, but how many people do you know that actually use it? That could change in the near future.
A lot of times, movements need to have ample time to settle before they become integral parts of our daily lives. Investing doesn’t have to be difficult, and you can even employ a crypto trading bot that can help you manage your accounts.
This Might Be the Best Time to Invest
So, is bitcoin dead? The information above shows that bitcoin is not only alive but also that the market will boost very soon. For that reason, you should definitely consider investing in bitcoin in the near future.
You can even get into the game by mining your own bitcoin. That’s a difficult process, though, and there’s a bit of a learning curve that goes along with it. If you’re interested in starting to mine bitcoin, we’ve got the information you need.