With the Bitcoin halving due in less than 2 days now, there is a renewed increase in all sorts of speculations around how Bitcoin is going to behave. There are the doomsayers who are sure this is going to be a painful year for the king of crypto, on the other hand we have the perma-moon boys who are certain the crypto gold is going straight to moon after the halving (they have been holding their breath for over 2 years now).
Through this article I wanted to share my views on why I think trying to predict with certainty how Bitcoin is going to move in near future is a futile exercise. Don’t get me wrong, I personally am a staunch supporter of Bitcoin and have firm belief that in future it will be the de facto currency across the world. What I don’t get is the constant need to make predictions about which way Bitcoin will move the next day, week or month.
I have been tracking Bitcoin closely for over 5 years now and one thing which I can say with some degree of surety is that it always does opposite of what the majority expect it to do. If you read most of the tech analysts betting it is ready to rocket, it will do a major correction. When they say it will definitely crash it gains 20% or more in a day. When they say it is a very risky choppy phase it will lie stagnant for weeks.
I don’t blame the analysts one bit, as Bitcoin is a totally different class of asset which can’t be compared effectively to any other class for several reasons.
Bitcoin is not like Fiat currencies!
Yes, the ultimate goal of Bitcoin is to be the standard common currency across the globe but it doesn’t have any resemblance to the common fiats like USD or EUR.
The popular stable fiats usually don’t move more than +/- 2% over a year, whereas Bitcoin is known to regularly swing +/-20% in a day. There are several reasons like whale manipulation, FUD & Greed. It will remain this way for several years to come and will only stop once the practical use cases of Bitcoin reach the critical adoption level.
Bitcoin is not like Stocks!
Many analysts like to think of Bitcoin as standard shares traded in the stock market and try to use the same techniques. What they don’t realize is stock movements are governed by the current value of the underlying company and how it’s products or services are expected to perform in the future. Unlike these corporations Bitcoin doesn’t have a annual balance sheet, profit loss reports or a board of directors to decide what it will do (thank god for that though).
Bitcoin is not Gold or any other Commodity!
Many people like to think of BTC as very similar to Gold, that may be true to some extent but not entirely accurate. Gold has been a popular mode of currency since time immemorial long before cash came into existence. It also has emotional and sentimental links to it’s applications in form of jewellery, ornaments, decorative pieces etc.
With other commodities like oil it’s relation is even more remote. Oil fluctuates purely based on demand (and some OPEC politics), if electric cars become common it will collapse.
Next time someone tells you with 150% guarantee which way Bitcoin is going to move think about these factors and take the analysis report with a pinch of salt.
If you are still treating Bitcoin as a way to make some quick cash then you my friend are still missing the whole point about crypto. If like me you are a diehard BTC maximalist then you know once it’s time comes there will be no need to sell it for cash, so just sit back relax and keep stacking sats during the dips.
STAY SAFE! From Coronavirus and from Bitcoin Whales!
Cheers,
SamBTC
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Originally posted on my blog at - https://cryptosensible.com/2020/05/10/bitcoin-predicting-the-unpredictable/
