Without a doubt, we are witnessing history. What Bitcoin has achieved and done is something that the financial markets have never seen before. There's very limited amount of BTC, and it is decentralized! We're currently going through a phase where the market is trying to determine the value of Bitcoin. The technology behind Bitcoin, blockchain is revolutionary and has so many real-world applications in virtually every sector.
We need to understand that fundamentally nothing has changed, and what is purely driving the price of bitcoin can be seen as the “tulip mania” phase. The amount of Bitcoin searches on Google has multiplied by 10x since July of 2017!
One can say Bitcoin is a bubble just waiting to burst, and is compared to the dot COM crash of the early 2000's At the height of the dot COM bubble, the NASDAQ stock index had a price-to-earnings ratio of 175. While Bitcoin has a P/E ratio of 708. That means based on valuation, bitcoins are four times more expensive than dot-com stocks were at the height of their bubble. (The P/E is found by dividing the total transaction fees by the current market price!)
With mass adoption in play, you can expect the prices to be more volatile than ever before. NASDAQ just recently announced they will launching futures for Bitcoin. With the CME group, the largest US futures exchange announcing they will likely offer futures contracts by EOY and TradeStation plans to make these contracts available to its clients ASAP. With CME & NASDAQ creating futures contracts for Bitcoin, it is considered to be a major step in making bitcoin a legitimate asset.
Bitcoin will have 30-40% corrections and it is deemed the norm during the current state it is in (Bullish). What could possibly happen if Bitcoin has a correction and actually goes bearish? 60%? 70%? Who knows! There are MANY reputable investors predicting prices such as 25,000 50,000 and even 100,000! Bitcoin is currently still extremely bullish, and we're keeping a very close watch on the movements of the price to see if a reversal of the bullish trend occurs. For Bitcoin to go any higher, it needs to consolidate.
Majority of the new traders that are trading cryptos, have never experienced a bearish market yet so most only know buy buy buy! Everyone's a genius in a bull market. I believe one of the problems most entry-level traders will have is they will be biased on the movement on the price due to their own position. Don't forget, you can make money both ways. Don't be ignorant. Trading opportunities happen every day! Don't be in such a rush to have a position open that you don't have planned out well. Create and stick to your trading plan, don't let your emotions get the best of you! Diversify your holdings, and be prepared for the worst. Always.
Now with all of this in mind... take a look at the market emotion cycle! Where could Bitcoin possibly be at this point? Is this the start of the excitement, or is this the beginning or end of the euphoria?
Its one thing to be able to predict where the market goes... trust me when I say this, many do! But the real challenge when it comes to trading is being able to use that knowledge to your advantage and profit from it.
There will always be winners and losers. It is up to you to determine which side you'll be on!
When you taxi cab driver is telling you about bitcoin its time to sell. This reminds me of silver in 2011
jlhequities
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Whats most entertaining to me is the comparison used to measure Bitcoin. There is tulips ( flower that doesn't have much real world application except to plant in the ground, so unless it was potentially going to cure cancer that bubble is no brainer) Theres the .com which was 3 trillion cap almost 20 years ago. So todays money is what 6-10 trillion? BTW, crypto will dwarf .com so start thinking 20+ Trillion before bubble alarms sound. Then there is the example above as in P/E ratio which is used to measure a company stock relative to corporate earnings. Not sure BTC is a stock and the blockchain its corporation but if thats what quantifies it then use it i guess. to compare it to anything you need to look back 400-500 years when the transition from single entry accounting to double entry accounting happened. from that point you can measure the wealth of 400-500 years that double entry accounting created. the entire world as we know it today came from it. So total value of everything in the world was the result of double entry. This is triple entry accounting, the very beginning of it as a matter of fact. So unless you can guess what the value created over the next 200 years will be then every measurement tool to compare to BTC and crypto is useless. Every tool for measurement that is being used came from double entry, so we don't even have the proper tools IMO to measure what is and is not its true price yet. This is price discovery, next month when 50 more uses of blockchain are discovered the price will then rise to meet the discovery. we have a long, long, long, long long, way to go with cryptos. So yes, human nature is the same, we will think "its too high" and sell and then it will recover and set new ATH, this is just human nature repeating itself. that fundamental has not changed, life as we know however is going too.
finglis59
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@jlhequities, Bitcoin is just "Entropy". (a monetary value of the energy changed to create/maintain the network) So the value of a Bitcoin is I'm afraid One Bitcoin. It is unique so comparison is futile.
windjc
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@jlhequities, here here. What is most entertaining for me the last 4+ years is watching ignorance keep talking about the death of bitcoin. Its hilarious.
Enhancement321
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$50,000 BTCUSD by the end of 2018.
DragonHawk
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High level hype for 2 more weeks, slight recovery from being overbought, then bullish for another 5-6 months before the hype can't save it from a major recovery anymore. Plenty of opportunity to profit before & after that though...
Mrlbrmn
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Did tulips make the people that bought in rich? No, I don’t think so. Bitcoin makes people rich. How much would you pay to be a millionaire?
JacobFranklin
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I get what you're saying here, but for the life of me I wish it would get more volatile. For example, last night around 2am we hit a massive sell wall for three solid hours. Today, it's artificial consolidation and a lot of smaller sell walls forcing apparent breakouts. There's an army of computers selling the stuff. The point of FIAT currency is to be able to control it so it can't be subject to excessive manipulation.