Bitcoin Is Waking Up.
By Abishek Viv on ALTCOIN MAGAZINE
I had an interesting conversation with my colleague who is an avid Bitcoin supporter. The following were some of the things we hope would create more legroom for Bitcoin to grow organically.
Currently, $11.5k at the time of writing this is far less of a value for such a sleeping giant. That being said I always like to do my own research rather than spending time speculating about the rise and fall.
Let’s briefly go through some of the causes which might affect the price of Bitcoin in the upcoming days/months/years to come.
- Classical Demand And Supply: The price of any product is driven by the demand and supply it sees in the open market*. Take a look at the combined demand of the Bitcoin(BTC) across all the markets. The increase in trading volume has a direct relationship with both demand and price rise.
Recently some of the exchanges have been reported manipulating the volumes of the BTC which lead to an artificial demand as can be seen from the CNBC reporting[1]. We will discuss about this in the upcoming post. But for now let's stick to our goal of finding whether the volume is increasing or not.
A few dollars spread indicates that there is good liquidity in the market. This leads me to use the volumes of three main exchanges to suit my research needs, Binance, Coinbase, and Kraken. Volumes from these exchanges show that there is a steady increase in the demand for BTC when it crossed the $8,500 mark.
2. Technological Adoption: We need to understand how major economies might put the Blockchain to use. For example, Germany has always been at the forefront when it comes to adopting new technological changes. Some of the major German companies along with reputable Universities are doing state-of-the-art research to explore the potential applications of Blockchain. Payment solutions for self-driving cars in the automotive industry is a great example. Since the name Blockchain has always been synonymous with bitcoin, the next wave of demand might come from this sector in a couple of years. An interesting startup group from Berlin called IOTA has been partnering up with a lot of Tier 1 and Tier 2 companies in the automotive sector is an interesting company to look out for.
3. Political Change: Some governments like India is really skeptical about the speculative nature of BTC and thus restricting its adoption so as to “protect its citizen from the Ponzi scheme [2 ]”. In the next 3–4 years, when major economies of European countries have successfully grilled out a use case for the Blockchain, other developing markets would feel a bit more comfortable about the adoption and thus would consider them for a regulation eventually allowing them into their markets. This would create another wave of a potential surge in the price.
4. Libra: Within 1–2 years of time frame there might be another wave of a buying spree and it would come from the successful adoption of Libra. Facebook has recently announced that it would release a major coin with the help of few companies. This, if successful, would pave the way for a huge amount of people rushing in to buy some BTC for the obvious reasons of FOMO. This may not sustain for the near future but some smart people would make a lot of money based on this.
5. Bitcoin Halving: This is an algorithm enforced a monetary policy to control the inflation rate to be in par with the gold standard. One of the few things which would happen in the next few months is that due to the Bitcoin Halving on May 2020, we might see an increase of at least 50% increase leading to the date.
Of course, there would be a lot of drama in between which would cause erratic volatility. Bear this in mind to get a good sleep if you’re a Hodl’er. If these things happen accordingly then the price might surely cross $30K dollars by the mid of 2025 or even before.
- Open market and the impact of regulations by different countries would be covered in the upcoming posts.
