What next for Bitcoin (and other cryptocurrencies that were caught in the recent fall)?
As Ray Dalio says, "Almost everything is just another one of those"
Here is the chart for SHCOMP (thank you tntsunrise):
It covers a similar 'parabolic' rise to that of Bitcoin in 2017, and shows how the market stabilized after its correction. It is perhaps an indication of what we might expect from Bitcoin for the next few months.
Things to keep in mind (my two cents):
Bitcoin has no intrinsic value. I am not 'downing' on Bitcoin. As a 'commodity', a single Bitcoin has been worth everything from half a cent to nearly $20,000 during the past nine years. Nobody has any idea, even roughly, of what it is worth. We know a new iPhone is worth more than $10 because they cost $225 to make; we know one is not worth $10,000 because that's just ridiculous, even Apple sell that $225 phone for no more than $650. When it comes to Bitcoin the market has no such obvious and reasonable price range, so the market must settle on one. Given the events of the past nine years, Bitcoin, at least for now, has developed some kind of associated price range, but it is wide: $0.005 to $20,000. After traversing that huge range of extremes, the price peaked and its amplitude began narrowing, and will likely continue narrowing, tighter and tighter. The price stability of a tight trading range would make it easier to use Bitcoin as a regular currency, but...
Bitcoin is highly subject to supply and demand. Last year proved this: as demand increased, the price shot up. That increase in demand could happen again and the effect would have to be the same: price rise. If there is a dramatic increase in the demand for iPhones, Apple can probably meet the demand by making more iPhones (given some time), and the retail price would not change (it may even go down). The creation of more Bitcoins is slow and predictable (though the creation of new types of cryptocoins can cater to some increased demand if people are not fussy which coin they buy), so increased demand is met with increased price.
Demand can also decrease. A lot of new investors will have been stung by the recent price falls, panic sold, and got out. Publicity will likely now revolve more around how much money you can lose investing in cryptocurrencies. Both these things will change the dynamics of the market. A decrease in demand must result in a decrease in price.
Personally, I'm keeping an eye on the larger picture and riding the smaller amplitude waves within it. Unless there is a big shift in publicity, public opinion, or imposed regulation, I mostly expect the amplitude wave to get narrower and narrower. But, it's the World of Cyrptocurrency, I am ready to be wrong.
Best wishes and good luck to all.
As Ray Dalio says, "Almost everything is just another one of those"
Here is the chart for SHCOMP (thank you tntsunrise):
Things to keep in mind (my two cents):
Bitcoin has no intrinsic value. I am not 'downing' on Bitcoin. As a 'commodity', a single Bitcoin has been worth everything from half a cent to nearly $20,000 during the past nine years. Nobody has any idea, even roughly, of what it is worth. We know a new iPhone is worth more than $10 because they cost $225 to make; we know one is not worth $10,000 because that's just ridiculous, even Apple sell that $225 phone for no more than $650. When it comes to Bitcoin the market has no such obvious and reasonable price range, so the market must settle on one. Given the events of the past nine years, Bitcoin, at least for now, has developed some kind of associated price range, but it is wide: $0.005 to $20,000. After traversing that huge range of extremes, the price peaked and its amplitude began narrowing, and will likely continue narrowing, tighter and tighter. The price stability of a tight trading range would make it easier to use Bitcoin as a regular currency, but...
Bitcoin is highly subject to supply and demand. Last year proved this: as demand increased, the price shot up. That increase in demand could happen again and the effect would have to be the same: price rise. If there is a dramatic increase in the demand for iPhones, Apple can probably meet the demand by making more iPhones (given some time), and the retail price would not change (it may even go down). The creation of more Bitcoins is slow and predictable (though the creation of new types of cryptocoins can cater to some increased demand if people are not fussy which coin they buy), so increased demand is met with increased price.
Demand can also decrease. A lot of new investors will have been stung by the recent price falls, panic sold, and got out. Publicity will likely now revolve more around how much money you can lose investing in cryptocurrencies. Both these things will change the dynamics of the market. A decrease in demand must result in a decrease in price.
Personally, I'm keeping an eye on the larger picture and riding the smaller amplitude waves within it. Unless there is a big shift in publicity, public opinion, or imposed regulation, I mostly expect the amplitude wave to get narrower and narrower. But, it's the World of Cyrptocurrency, I am ready to be wrong.
Best wishes and good luck to all.