It is difficult to make predictions. Especially for the future, Mark Twain had said . It is becoming even more dangerous at this time. For every purchase, not just crypto. For example, we may see the risk of a pandemic rekindling, making a second, more lethal wave possible. If so, what will be the government's response?
It will be difficult to see again generalized restrictions on travel and closing of economies. The economic price turned out to be very high. But what if it means faster and more widespread? When will the vaccine be released, in fact in a safe version and with the possibility of mass production? Has the pandemic weakened by reducing the mortality rate or are we waiting for new, more deadly mutations?
Difficult questions, with even more difficult answers . But the course of the markets will depend on them. And of our lives.
The image of bitcoin
Despite the uncertainty, the overall picture in bitcoin is encouraging. Even after events that have upset and derailed huge businesses, giant industries, entire states, its price is exactly where it should be. It is perfectly normal that he has not made a new high , as Nasdaq did, for example. After all, bitcoin has been more efficient since the beginning of the year.
S&P rose 20% in the previous quarter, the highest level since 1998. Europe's Stoxx 600 rose nearly 13%, while the Asia-Pacific MSCI rose 15%. Which is an impressive record for stocks, for bitcoin was a rather common case, judging by the table below. Last quarter, it was + 42%, which, although higher than the shares, is a mediocre performance.
The course of bitcoin can be divided into cycles of about 4 years , where we have the appearance of the phenomenon of halving (vertical green line). Each cycle is divided into 3 phases. At the beginning, there is an upward trend (green background), until its peak. This is followed by the fall (red background) and then we have the stabilization (yellow background). The next phase is the gentle ascent (gray background), where there was never a new high or a new low.
Bitcoin seems to be in this period. The frantic rise that lasts a year, always starts after halving and is marked by the breakdown of the previous high, which in our case is at $ 14,000 . In the second cycle it started 100 days after halving, in the third, after 300 days. Today we are in 60 days.
The fall of 2018 was needed. It was redemptive . The opportunists left and those who have realized its dynamics remained. The price of $ 20,000 was much higher than the conditions of the time justified. Many have entered the market lightly, without even knowing how it works or what the philosophy of bitcoin is. With the sole motive of quick profits and with the supply of risk ignorance, they participated.
Each rising wave attracts the wrong people. Opportunists, swindlers, gamblers, enthusiastic naive people who are indifferent to the technology and the complications it brings. Whatever the motive, the faithful will remain in the field.
The condition for the recovery, as is the case in all periods of excessive euphoria , was to disappoint and leave first those who have been involved in the area to get rich in one day. When prices fall, opportunistic investors disappear. Those who focus on technology, on fundamental principles, remain. Those who are interested in learning what makes bitcoin so great.
Critics say bitcoin is as complex as capture for the vast majority of the population and will never be widely accepted and adopted. This is true, but this interpretation omits some critical points. And the Internet in its early stages was just as complex. But then he took steps to simplify it and was able to get close to the average computer expert and later to the beginner.
Likewise, bitcoin used to be difficult to use for the "common mortal" who had no idea about programming. This is not the case today and it will be even easier tomorrow. Business and technology revolutions don't happen overnight, they take time. When the mass spread of the Internet began to appear, many doubted its dynamics. They claimed that there are not enough people with skills in programming, that it will block if many e-mails are circulating, that we cannot watch videos.
A technology never fails when there is demand . It only fails due to lack of interest. As long as they continue to deal with it, solutions are found one way or another. The blockchain space enjoys the chance to have attracted strong minds, a lot of talent, ambitions. Innovative investors, a community of millions of users, which is constantly expanding. All of these are the guarantee that we will have pleasant surprises in the near future.
Proof of the growing demand are the active addresses. That's most of the $ 20,000 peak period. Something that has not yet been seen in the price.
Bloomberg's new analysis
Until recently, it was important news for Bloomberg to release a special edition for its bitcoin customers. Not anymore. That is why we will mention only two points from yesterday's analysis, which fell into our hands.
The first concerns the Grayscale Trust , the fund that approaches the logic of an ETF, trades as a stock on Wall Street. Its total capital has increased by 1/3, despite a 12% decrease in the value of bitcoin. They are now worth $ 3.5 billion and are proving the interest of the mainstream capital managers.
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Perhaps the most interesting element is at the end. They estimate that the accumulation of the price in the range of $ 8,000 to $ 10,000 is more likely to lead to $ 13,000 than below $ 8,000.
