After falling all the way to $6000, Bitcoin has started recovering. The digital currency started rapidly increasing in value after its decline and has climbed back up to over $8000. Although the BTC value is still not as high as it once was, the rapid increase in value has led many to believe that the currency will reach new heights in 2018.
Bitcoin was poised to end last year on a high as the currency almost reached the $20,000 mark. However, it was not meant to be as the cryptocurrency plunged due to restrictions placed in the South Korean market. Bitcoin hasn’t been the same since that point. The decline of Bitcoin saw many altcoins grow exponentially.
Although the start of 2018 saw Bitcoin recover past $15,000, it fell again when more restrictions were put in place in leading markets. It was also proposed the South Korean government to ban cryptocurrency trading altogether in the country.
Afterwards, the entire cryptocurrency market faced a huge correction which saw more than hundreds of billions of dollars of the market cap being wiped out. However, despite all of that, Bitcoin managed to stay above $10,000. Many thought this was the stabilized price of BTC due to the currency hovering around the $10,000-12,000 price range for a significant period.
That was not the case as Bitcoin recently saw a massive decline and fell to as low as $6000. Its current market cap is $137.5 billion (as of this writing), that is a huge blow to the cryptocurrency as its down $201 billion in market cap from its all-time high.
However, it seems that Bitcoin isn’t ‘done’ yet. The currency has seen rapid price increases in the past two days as it surged from its 2018 low of $6000 to above $8000. Here are the currency’s price trends for the past few days:
Why the sudden price increase?
The currency declined massively falling below $10,000 for the first time in months but the price rebounded very quickly as well. There are a few explanations for the rise in Bitcoin’s price amidst all the chaos.
The recent rise in the currency’s value could be because of increased confidence in the currency. The price decrease could be interpreted as those investors distancing themselves from Bitcoin who had simply invested in it to earn some money and not invest in cryptocurrency for its intended use.
Confidence in Bitcoin is so high that Cameron Winklevoss, CEO of Gemini Exchange thinks that Bitcoin will soon become more valuable than gold. He said:
“Taking bitcoin in isolation, putting all the other assets aside, we believe bitcoin disrupts gold.”
“We think it’s a better gold if you look at the properties of money. And what makes gold gold? Scarcity.
He also went on to say that Bitcoin is more durable, portable and fungible. He also mentioned that the market (cap) value of Bitcoin is still much lower than that of gold thus there’s still a “buying opportunity” for Bitcoin.
Thomas Glucksmann of GateCoin also commented on Bitcoin’s potential saying that the digital currency could make gains in the financial market.
“Increasing regulatory recognition of cryptocurrency exchanges, the entrance of institutional capital and major technology developments will contribute to the market’s rebound and push cryptocurrency prices to all new highs this year.”
He also made a staggering claim that Bitcoin could very well reach $50,000 towards the end of 2018.
Nothing is certain regarding what will happen and what actually does happen but there may be some truth to what everyone is saying. As Glucksmann said, there are some technological advances that will come Bitcoin’s way soon. Those improvements will help Bitcoin break records in 2018.
Some of the technological developments include an improvement to Bitcoin’s overall network. A new “lightning network” will be implemented which will help Bitcoin in improving on the one thing it is criticized heavily for; slow transaction times.
Whenever a comparison is made between Bitcoin and any other currency, the former’s slow transaction times are always mentioned in the comparison. With the new network in place, things will significantly improve for existing and new Bitcoin investors.
Although Bitcoin may be improving its technology which has drawn the attention of many people, there’s also another reason for the price surge which may be equally likely. Many people think of the recent fall in value as an opportunity to buy Bitcoin. That speculative demand for digital currency has and always will be there.
Therefore, the low price caught many people’s attention, especially those who missed out on Bitcoin initially. That increased the demand which in turn, increased Bitcoin’s price. However, if this was mostly the case, then Bitcoin’s price will likely come to a halt again instead of surging higher.
What does the future hold?
The general consensus is that Bitcoin will increase to a higher price. There are those who believe that a “crypto winter” is coming. It was believed that cryptocurrency will no longer rise in value exponentially over time due to different regulatory decisions against cryptocurrency. However, there is still a large number of people who believe in the crypto winter, who believe that Bitcoin and other currencies will see similar gains to those in 2017.
“We believe after February the market will likely go on a bull run comparative if not greater than last year potentially reaching the trillion-dollar mark before a proper crypto winter sets in where the market becomes more focused on proper market fundamentals,” says Jamie Burke, CEO at Outlier Ventures.
Julian Hosp, a cryptocurrency entrepreneur also said a few months ago that Bitcoin will rise to as high as $60,000 but it will fall as well.
“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 made this remark a few months ago but the current situation looks like what he predicted. Bitcoin did go as low as $6000, will the currency go as high as $50,000 or more as many have predicted? only time will tell.
However, it seems as though if the currency is to surge, it will surge because of increased interest from serious investors. According to CoinTelegraph writer Darryn Pollock, Bitcoin is no longer a way to make a “quick buck”. This was the case back when Bitcoin was powering through 2017, it saw many people make a lot of money. However, that only inflates the currency further, however, according to Pollock, Bitcoin might not be able to bring that much profit to ‘amateur’ traders again.
Whether or not Bitcoin rises even higher in the future remains to be seen. The cryptocurrency market is highly volatile and anything could happen. However, if there’s one thing to take away from Bitcoin’s recent bull is that the cryptocurrency’s run at the top isn’t over yet, it’s here to stay.