The FOMO crowd is back in town. Will Bitcoin have a blockbuster comeback?
Bitcoin and cryptocurrencies are on the rise again. Over the last 10 years Bitcoin has been tested against all kinds of foes, ranging from hacks and scams to hostile governments, and showed its resilience every time. This time around it might have the opportunity to replace fiat currencies.
On Sunday, the price of Bitcoin (BTC) hit a 13-month high, above $9,300. This is the highest price Bitcoin has seen, since May 10, 2018. Trading volume peaked with over $19 billion worth of Bitcoin traded across cryptocurrency exchanges. BTC is dominating the market share for cryptocurrencies, rising up from 55% to 57%.
Will Bitcoin have a blockbuster comeback?
Its looks like the FOMO crowd is back in town again and they are showing in hordes. According to CoinMetrics.io, there are now over one million daily active addresses, a number that is defined as the number of unique “from” or “to” addresses used per day. This is a number we haven’t seen, since November 2017. Bitcoin market cap has jumped almost 3x, going from around $60 billion in December 2018, to $170 billion now.
One of the reasons Bitcoin has seen a strong comeback is due to the trade war between US and China. Usually during turbulent times, Bitcoin has always been a very strong safe haven for investors. Another is just natural price discovery. When you understand what Bitcoin really is, then you understand it’s importance. Bitcoin is the most powerful inventions, since the advent of the Internet, introducing digital scarcity in our lives, as we become exponentially digital.
Facebook upcoming roll out of its cryptocurrency, as soon as next week, has also helped fuel Bitcoin gains. With an array of heavyweight backers, that include Mastercard, Paypal, UBER and Visa, its expected that Facebook’s stable coin will make a big slash.
Unlike traditional cryptocurrencies like Bitcoin, Facebook’s cryptocurrency is centralized, and verification is controlled by a select group, rather than the public. The cryptocurrency is pegged to USD, a hard asset, as a way to manage volatile price swings, that have been associated with Bitcoin, Ethereum and other cryptos.
In a recent Q&A on Youtube, Andreas Antonopoulos, said that Facebook’s coin is not a cryptocurrency:
“What Facebook, or companies like Facebook, are proposing is not a cryptocurrency. It doesn’t have any of the fundamental characteristics of cryptocurrencies. It does not stand on the five pillars of open blockchains. In fact, it stands on none of those five pillars. What are the five pillars, that we talked about before? You have probably heard me say this a few times. A cryptocurrency is open, public, neutral, borderless, and censorship resistant.”
Even if Facebook’s Globalcoin ends up failing, the company’s foray in into the market is good news for Bitcoin and other cryptocurrencies. In the past, Facebook attempted to create its own payment system, developing a digital currency called Facebook Credits. but folded it in 2012. Yet, when big players like Facebook enter the cryptocurrency market, it only helps build trust and brings more credibility to the entire market.
Many are still wondering if this rally different from that in 2017 or if its just pump and dump, staged by a few investors.
History never exactly repeats itself, but always shows resemblance. This kind of parabolic rise in prices followed by a dramatic drop, has happened several times in Bitcoin’s lifetime. But, when we look at the of bull runs of 2013 and 2017, they very different and mainly driven by retail investors. This time around, things are different.
Recently, Bitcoin has been recognized as a new asset class, so what we’re really seeing is the mainstream adoption of Bitcoin. Today, the crypto market has attracted more institutional investors. Institutional investors have poured in over $30 billion into building platforms. Also, regulations are taking shape in different countries, which is why we are seeing big players like Facebook, Goldman Sachs, Fidelity and JPMorgan Chase, getting in the cryptocurrency market.
When it comes to digital assets, ICOs, STOs, IEOs, a lot of the new projects are coming up right now, trying to capture the money. Also investors are buying up Litecoin, as its halvening is expected this August. Since the beginning of the year, Litecoin’s price has gone up 300%.
Ultimately, over the next few years we are going to see nations and central banks buying up Bitcoin, as the new gold reserve. The true success of Bitcoin will be achieved, when we don’t have to sell our Bitcoins and convert them to fiat.
