As at present, though relatively higher than the price seen in the first half of 2017, the price of Bitcoin has shown little or no promises of the highly predicted 100k USD by the end of 2018. This therefore begs the question- "Is it too late to buy Bitcoin?"
The "king crypto"; Bitcoin, has proven, beyond reasonable doubts, a volatile cryptocurrency. It's market traction and price movements during the second half of last year was particularly dramatic. At just few months to the end of the year, the highly controversial digital currency glided swiftly, recording an all-time high as it touched around 20k USD. After this "Canaan land" experience, many investors have been lured into believing that Bitcoin could even behave more drastically in the year 2018 and this has caused many investments and a general increase in total market capitalization. As at present, though relatively higher than the price seen in the first half of 2017, the price of Bitcoin has shown little or no promises of the highly predicted 100k USD by the end of 2018. This therefore begs the question- "Is it too late to buy Bitcoin?"
The most probable answer is that no one knows. Some analysts predicted that Bitcoin would rise again towards the end of the year, every year. It may even reach greater heights. Bitcoin optimists say that there is plenty of room for values to increase in the coming years and that six-figure prices are not out of the question. Pessimists contend that Bitcoin prices are a bubble that will inevitably burst, and anyone invested in the coin at that time will be left with nothing.
Bitcoin circulating supply
A set of information are necessary to be understood. Although Bitcoin was not the first cryptocurrency to be developed, and in fact, was actually built on the relics of some primitive unsuccessful digital currency, it was launched in 2009 by an anonymous Satoshi Nakamoto. It is a digital currency, a quality of which makes it a decentralized distribution ledger whose transactions are formed and recorded in “chains of blocks”; a network now commonly known as the Blockchain, with each block in the chain being verified by an algorithm system of cryptographic calculations.
The limited supply of Bitcoins is fashioned to prevent the kind of currency flexibility where governments or central banks increase the money circulation to regulate the economy, causing inflation. Inflation reduces the value of money in circulation. Bitcoin’s system, in contrast, should ensure that Bitcoin retains its value.
Does that make it a good investment? Not necessarily. Land is generally considered a good investment because its supply is limited, and people will always need land to build places to live and work. It’s very hard to live in the developed world and not have to rent or buy land. It’s very easy, at present, to ignore Bitcoin. As it becomes more widespread, Bitcoin’s intrinsic value will increase.
Price flexibility
That said, it is also clear that there is enough interest in Bitcoin for the price to have risen considerably. Even ignoring the price rise at the end of 2017, someone who bought a single Bitcoin on September 7, 2017, would have paid around $4,600. A year on, that Bitcoin would have been worth around $6,300. That’s a profit of $1,700, which is better than most of the options for investing that money over 12 months.
In between those two Septembers came a period of rapid growth, up to that point of almost $20,000, followed by equally rapid decline. That led some respected figures, such as Alan Greenspan, the former chairman of the US Federal Reserve, and Jamie Dimon, the chief executive of JP Morgan, to warn that Bitcoin and other cryptocurrencies were experiencing a bubble.
The ‘dotcom bubble’ of the early 2000s is a good example: investors saw a few internet companies increasing hugely in value and began chasing any internet stocks they could find. The value of the entire sector increased but only a few companies within it actually had businesses that could make the profits necessary to justify that value. As companies failed, stock prices in the sector collapsed.
Bitcoin shows some signs of a bubble because it’s rising values seem to be driven by people who are buying in for no reason except that they think values will go higher. However, bubbles are tricky for economists to forecast. It can be hard to say when one is happening and it can be equally hard to tell when one has ended. If Bitcoin was experiencing a bubble, did it burst when the price fell from $20,000 back down towards $6,000?
In conclusion
It is fast becoming a fact that the price changes that Bitcoin has experienced over the years are rather manipulated than what could be classified as organic growth. Several researches, on most especially, the Bitcoin price of last year and that of many other cryptocurrencies revealed that Bitcoin has been under major influence and manipulative forces from the Giants within the crypto space.
No firm evidence has been found to prove that manipulation is happening, but the researchers said the pricing patterns they found “cannot be explained” by normal investor behaviour. If they are correct, then investors face considerable uncertainty about a possible price crash.
As we said at the beginning, nobody knows if it’s too late to buy Bitcoin. If you believe that Bitcoin has value because of its utility as a digital currency and its limited supply, then it is likely that prices will continue to rise overall, with or without the volatility that we have seen in the past.
