[BTC/USD] Price Analysis: $10,000 for Bitcoin in 2019 — Is It possible? Of Course!
[BTC/USD] Price Analysis: $10,000 for Bitcoin in 2019 — Is It possible? Of Course!

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

  • Darryn Pollock
    🤷 Opinions

    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?
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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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Ethereum Price Predicted to Climb in the Long Run as Buterin Explains Need for Higher Coin Values

  • Jack Thomas
    🤷 Opinions

    Vitalik Buterin, the co founder of Ethereum, has come out and said that while the price of a coin is not that important, it is still a good thing for ETH to rise. He made mention of security, and the ecosystem development being better when the price of Ethereum is higher.

Ethereum Price Predicted to Climb in the Long Run as Buterin Explains Need for Higher Coin Values
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Ethereum is in a key phase of its development, having pioneered the smart contract blockchain. It is now in a position to take things further and grow its ecosystem as it looks to, for one, switch its algorithm from proof-of-work to proof-of-stake.

This development of the ecosystem will no doubt have an effect on the price of the Ether token, but more than that, Ethereum’s co-founder Vitalik Buterin has said that a higher Ethereum price is good for the development of the Ethereum ecosystem, as well as adds a higher level of security.

Essentially, it is a double-edged sword as the price of Ethereum is expected to rise when any cryptocurrency project is doing well, but the long term price prediction is then expected to rise, as Buterin adds it will help improve the project further.

Buterin’s beliefs

Buterin made his comments during an interview for Laura Shin’s crypto-focused “Unchained”.

In response to Shin’s question as to whether protocol designers and project leaders should be focusing on the question of a cryptocurrency’s price, Buterin spoke of how the Ethereum project had explicitly downplayed the importance of the asset’s value earlier on in Ethereum’s history.

“In part, it was counter-signaling to distinguish ourselves from other crypto projects that do pumping and lambo-ing way too much. But it was also about minimizing legal risk by basically trying to make the project seem more distant from something that would be covered by financial regulation.”

However, he has now gone on to explain that in today’s context, the price does in fact have a part to play.

“I can tell you what things are clearly important about why the price being higher rather than lower is good. One of them is obviously security. If the price is zero, then the network can’t be secure. That’s true in proof-of-work and proof-of-stake,” he added.

Long-term price prediction

With this being said, it makes sense that the price of Ethereum is thus being aimed at long-term growth. The project itself is working on improving its own worth and value as a blockchain project, and in that, the price of Ether should also naturally rise.

And, with a focus being on the importance of a higher price adding to the value of a blockchain project, this could even compound the growth of Ether's price in the long run.

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