As you know, it is a tough ride that Bitcoin is making at the moment. But Bitcoin doesn't care is the saying. Bitcoin has no expectations or dreams. Now that Bitcoin has risen above 30,000 dollars Bitcoin seems unstoppable.
But don't forget what happened in 2017. This was a lesson not to get involved with FOMO. But what exactly is FOMO. FOMO stands for "Fear Of Missing Out". It actually indicates that you are afraid of missing out on potential profit.
Now in 2020/2021 you will see FOMO growing again in blogs, twitter posts and on other social media. It looks more and more like 2017 and this will continue for a while. But remember, it's wise to make a profit if you can.
We will discuss the following:
- Is the Bitcoin FOMO back?
- Is it really like 2017?
- What can we expect?
- Final thoughts
Is the Bitcoin FOMO back?
The Bitcoin FOMO of 2017 is it back? Will the other tokens and coins go along with this? This is only a matter of time if Bitcoin continues to rise.
Now I don't want to say that the sword of Damocles is hanging over Bitcoin's head. But the buyers are accumulating day after day. So that a correction is arriving is only a matter of time. When we look at the past, this has always led to extreme corrections. Now this is no guarantee for the future. Just a word of caution to beware. Because if a correction arrives, it may well be very steep.
Bitcoin is making headlines all over the world. And companies, hedge funds and institutions are buying up Bitcoin. Now it so happens that search engine marketing data tells us that there is a great interest in Bitcoin among companies.
Is it really like 2017?
It seems that the FOMO is not as fierce as it was in the year 2017. This was reflected in the number of many Bitcoin deposited into exchanges to exchange for fiat money. This happened in 2017 and 2019 on a much larger scale than in 2020/2021. Now it is just the opposite of what happened. Many Bitcoins are stored in a wallet of which you own the private keys. This could well be a positive sign. It is true that you cannot quickly sell your Bitcoins on an exchange. Because you first have to send your Bitcoin to an exchange, which takes a certain time.
The major Bitcoin commentators are predicting great heights for Bitcoin. But we shouldn't forget that some of these commentators weren't that keen on Bitcoin for the year ahead. So you see again how quickly emotion can change.
Now it is also the case that the Corona pandemic has reduced the demand for money. Companies and people who have found Bitcoin again because of this. They see it as a store or value. This can be temporary or for a much longer period. Because what happens when the demand for money rises? Are they the same people and companies returning to fiat money? So there are many factors that play a role.
At those moments you have to be careful in the crypto world. But it often happens that this is not listened to. Only if you know the mistakes from 2017 and no longer practice you can look to the future much more safely. That way you don't become a victim of FOMO.
Charles Mackay once said:
let's not get caught up in the madness of the Bitcoin buzz. This is a time to consider adding Bitcoin to your portfolio gradually, rather than loading the boat at record highs.
What can we expect?
What we can expect from the Bitcoin price depends on many things. For example, it depends on the economy, regulations and bitcoin halving. These are very interesting developments to follow. Of course we cannot look into a crystal ball.
But we can look to the past. For example, you can look at the Bitcoin halving that has occurred. When the block halving has taken place, the number of Bitcoins that the miners receive for finding a block will be halved. Previously they received 50 Bitcoins for each block, then 25 Bitcoins per block, then 12.5 bitcoins per block and now the fourth block is halved to 6.25 Bitcoins per block.
There are traders who think that the block halving has some influence on the price of Bitcoin. For example, in 2012 the first halving took place and a year later Bitcoin reached its all-time high. This will also happen after the halving in 2017.
How is that possible? The portion mined for Bitcoin is often immediately sold to cover the costs of mining. Once the halving has occurred, sales will decline. This can then have a positive effect on the price. No one can predict if it will happen at the fourth half.
Does block halving have any effect on inflation?
Satoshi Nakamoto has made everything clear beforehand:
It is certain that up to about 21,000,000 Bitcoins are mined. And the last part of the Bitcoin will be mined around 2140. This ensures that Bitcoin inflation is transparent. Inflation will only decline, which is not the case with monetary inflation. This would, in theory, increase the value of the Bitcoin.
As we have discussed, it does not seem that we have ended up in the same FOMO as in 2017. However, this does not alter the fact that a major correction can always take place or that a lot of FOMO can still be received.
It is also wise if you want to buy Bitcoin to do this in gradations. And not at the same time with a lot of money. If a major correction does arrive then you are in any case safe.
It can go in any direction with the economy, regulation and the Bitcoin halves. You can therefore conclude that the price has been predicted for some time by looking at the past. But this is by no means sacred.
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A few easy steps to keep your crypto safe:
- Never give someone your 12 / 24 passphrase!
- Never give someone your private keys!
- Not your keys not your coins!
- Just don't send any coins to strangers that ask for coins to double your investment!
- Don't use a centralized exchange as a wallet!
- Don't use centralized exchanges if this is not required!
- If you send your coins or tokens think twice before doing so!