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When Is Bitcoin Dead, and When Is It Just a Bubble?

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  • Darryn Pollock
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    Speculators are declaring Bitcoin to be dead and that the market will soon fall to zero. Bitcoin’s bubble may have popped, but that’s different to being dead

When Is Bitcoin Dead, and When Is It Just a Bubble?
Cover image via u.today
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Having fought tooth and nail to state that Bitcoin was never a bubble, and was never going to act like a bubble as the price of the asset shot up spectacularly based around pure speculation, it has come time to concede. Bitcoin’s pattern has all the signs of a classic bubble.

However, the naysayers of the cryptocurrency space are not content with calling Bitcoin a mere bubble: they are now declaring that the digital currency is going to die, and the market will soon be going to zero.

While the latter end of an asset investment bubble has all the makings of what would appear like the death of a market, as it rushes down to newer and newer lows, there is a big difference between a bubble pop and a dead market.

Bitcoin has many attributes that prove that this move from $20,000 to $3,000 in almost precisely a year is a bubble, and even more evidence to suggest this is not the end of the cryptocurrency. When it comes to Bitcoin, there are other factors to consider, such as mining and death spirals, as well as interest in the technology underlying it.

But as it stands, the movement of this price bubble seems to be bottoming out with a future still very much on the cards. What that future will be is impossible to tell, but the evidence is that there is future planning.

A real death

With most asset markets, there is certain specific ways in which the market can die, such as oversupply of an asset, or a loss of demand. In the case of Bitcoin, there is the ever present threat that many like to laud over: that of the death spiral.

Bitcoin advocate Andreas Antonopoulos explains:

“Some people assume that if [death spiral] happens, then a lot of miners will say ‘okay, I’m not making enough profits anymore because the hash rate has dropped 50 percent, so I’m going to turn off my mining’ which then causes to drop even further, which causes it to get even slower, which causes to drop even further, drop slower, death spiral, difficulty never adjusts,” says Antonopoulos.

However, this is unrealistic as according to him, “miners have a much more long-term perspective.”

Bitcoin is designed in a way that if there is a drop in hash, there is also a drop in difficulty, and for many miners, it is not about calling it quits as soon as things go pear-shaped, but it is rather about riding out the storm as there will always be another chance to be profitable again.

A buyers market

Another consideration to take into account is that even with the price dropping, people are viewing the Bitcoin market as a buyer's opportunity. Many feel that because the bubble has popped, this is the perfect, non-speculative time to enter in and buy up Bitcoin as a store of value.

A blockchain ecosystem

More so, with the market for Bitcoin being down and losing steam, there has been more room for a focus on the underlying technology, blockchain. Blockchain’s worth has never been questioned, and because of that, many feel that its link to cryptocurrency will help it keep going.

The latest report, titled “2nd Global Crypto-Asset Benchmarking Study by the University of Cambridge”, explained that this is a ‘delay’ rather than a death.

“The speculation of the death of the market and ecosystem has been greatly exaggerated, and so it seems likely that the future expansion plans of industry participants will, at most, be delayed.”

It further reveals few key findings that involve:

“Total user accounts at service providers now exceed 139 million with at least 35 million identity-verified users, the latter growing nearly 4X in 2017, but most remains passive. Additionally, individuals constitute the largest share of the user base.”

“When it comes to mining, the majority of identified mining facilities use some share of renewable energy sources as part of their energy mix and mining is less concentrated than commonly perceived. China remains in the top-3 countries to host mining farms while the USA and Canada are seeing rapid growth.”

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About the author

Darryn Pollock is an award winning  journalist from Durban, South Africa. He picked up Vodacom’s Regional Sports Journalist Award in 2017 while expanding his Blockchain and cryptocurrency reach.  He is a contributor to Forbes, Cointelegraph, Binary District, and of course, U.Today. Darryn’s belief is that Blockchain technology will be the driving force of the next technological wave and it is the obligation of journalists and writers to tell its emerging story with integrity and pride.

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Bitcoin Price to Hit $250,000 Due to Lightning Network Use by 2023: Tim Draper

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    World-famous investor and Bitcoin bull Tim Draper explains what reasons will push Bitcoin price to $250,000 by 2023

Bitcoin Price to Hit $250,000 Due to Lightning Network Use by 2023: Tim Draper
Cover image via en.wikipedia.org

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

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While speaking to the audience at the Malta AI & Blockchain Summit last week, the billionaire and prominent Bitcoin supporter Tim Draper confirmed his previous forecast for the BTC price hitting $250,000 in the near future.

This time he explained that this high price per one BTC will be achieved through the growing use of the Lightning Network and explained how it will happen from his point of view.

Bitcoin still to hit $250,000

The Bitcoin permabull Tim Draper again stated that the Bitcoin price is going to hit $250,000 by 2022-2023. He said this will happen due to the growing use of the Lightning network which allows conducting payments in BTC easily.

Being a major global investor, he nevertheless shares the opinion of many crypto enthusiasts that BTC is not only a store of value but it can also be used to pay for things in everyday life – micropayments, the retail sector, etc, i.e. is perfect for adoption.

Previously, Tim Draper stated that his forecast of BTC reaching $250,000 was actually a quite conservative prediction.

Will Bitcoin get to be worth $1 mln?

As reported earlier on Wednesday by U.Today, the crypto asset manager and a trader Marius Landman tweeted that before Bitcoin hits $1 mln, it is bound to go through ‘super hyper inflation’, in which price drops by $20,000 will be considered insignificant.

He also expects Bitcoin and Litecoin to show ‘subito motus’ (Latin for ‘sudden movements’) soon, saying that this will leave uninformed investors and technical analysts at a loss.

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Smaller bullish BTC forecasts

Other traders and analysts seem to think more vaguely when they are looking at technical analysis graphs. They are bullish, nevertheless.

The @crypto_rand trader with over 216,000 followers on Twitter simply posts a chart, saying that Bitcoin ‘still looks bullish’.

Another analyst and trader PlanB has published a chart of the way the changes in the Bitcoin mining difficulty have impacted the BTC price. People in the comment thread agree that this data at the moment is bullish for the Bitcoin price.

At press-time, Bitcoin is sitting at $8,823.

BTC price CMC
Image via CoinMarketCap

 

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About the author

Yuri is a journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future. ‘Hodls’ cryptocurrencies. Has written for several crypto media. Currently is a news writer at U.Today.

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