Saturday, 30 May 2020

Will Bitcoin’s Price Recover?

Bitcoin has had a slow 2018, ICOs are down, but blockchain startups are still being founded a record rate.
With Bitcoin’s price continuing it’s 2018 decline into the summer, it now rests at or near the $6,000 mark.

Meanwhile on CNBC, a slew of analysts predict a Bitcoin price recovery, so far for the most part they have gotten in wrong and now they are saying it should come not in the 2nd half of 2018, but in 2019. We’re also due for an economic recession a cycle that is typically 5–7 years, has now gone on 10+ years since the “great recession” of 2008.

The global economy has never been the same, and when the next recession comes it could be deep, and crypto could see a renaissance then. To me, that’s closer to the year 2020.

Regulation in the crypto space takes a long time, from the SEC deciding Ethereum is not a security to how it goes after ICOs, it’s a legal grey area that will take many months (and years) to resolve. Market manipulation, tech entreprenurs getting into Bitcoin early (mostly HODL), and the impact Bitcoin futures had on the market, it would take a lot to see a huge rebound in Bitcoin in 2018.

Bitcoin did not have a great Spring of 2018, it was down 19% in May alone. But we keep thinking Bitcoin is bearish since we compare it with its all-time high of December, 2017 that may have been an anomaly. If we compare it, on the other hand with its price this time last year, it’s really not doing that bad. The crypto singularity of late 2017 spawned more altcoins and blockchain startups all over the world that few things in the last few years of technology did.

Many believe it will hit lows of $2,000 before it truly rebounds. Only April was really a good month for Bitcoin and likewise for crypto hedge funds. Likewise while developers are rushing to work in the blockchain space, investments funds are being set up and banks pivot to the blockchain, investing in cryptocurrencies, altcoins, tokens and dApp platforms is highly speculative and the market is largely unregulated. The regulatory pressure on ICOs has (minus EOS and Telegram) hit the funds being raised in 2018, as compared to 2017.

If Bitcoin is the symbol of a changing world, 2018 is a figure of uncertainty in multiple ways, geopolitically and in our entire relations with authoritarian and neo-nationalist forces. Banks happen to be one of the authoritarian figures in our lives; and we can’t forget that moving forwards. Decentralized ledgers are a reminder that the power-structure of the future may be different.

With more stories of ICO fraud and cryptocurrency market hacks; how can it be good news for Bitcoin? Bithumb is reported to have lost $30 million in cryptocurrencies after a massive hack hit the exchange. Japan has really cracked down. Bitcoin’s massive energy expenditure that is needed to mine them, is a hit against Bitcoin’s mainstream adoption.

After Broad Regulation Could Come Another Crypto Surge

Once crypto achieves stability in regulation, technology, and general use, they will likely then be “re-released” and see a resurgence in market interest. This combined with a slow global economy could result in cryptocurrencies having a renaissance of sorts. We don’t know exactly when this will be, but likely a matter of years and not months ahead.

Yet in parts of Asia the ubiquity of crypto payments is obvious where “digital currencies” are just a part of life.

Payments in crypto is increasing across services and popping up in pockets all over the world, inspite of bearish prices; regulatory confusion and speculative volatility in the markets.

That CNBC and Bloomberg have so much crypto coverage, shows these things aren’t just going away. The amount of developers that a platform like Ethereum is attracting is reaching a threshold of credibility; whatever becomes of the scalability problem it is under pressure to overcome. If that happens, we could see Ethereum taking over the mantle of cryptocurrencies as Bitcoin is one year older with each passing year.

In 2018 we have witnessed a hard fork in how the media covers blockchain vs. crypto. Admitely maybe the yin and yang of decentralization. Todd Gordon of predicts for a Bitcoin drop to 4,000 before a rebound to 10,000. The general lull in public interest in cryptocurrencies at the moment was 100% engineered by governments, tech companies (banning Ads on them), but hopefully the future of crypto won’t only be controlled and manipulated. What if the most decentralized blockchain solutions end up winning?

By Michael Spencer
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