Why Bitcoin Price-drop is Good for You.
By mukesh jha on ALTCOIN MAGAZINE
This is not the first time Bitcoin price has dropped enormously. The price drop we are experiencing today is relative to its ATH (all-time high) price of $20,000 that had reached on 17 December 2017.
Looking at the price chart from a different perspective shows us that the current price of Bitcoin which is $3800, is, in fact, a whopping 413% higher than the price before 2 years ago ( $740 on 26 November 2016). And it is 1087% higher than the price before 3 years ago($320 on 26 November 2015).
When I had first heard of Bitcoin in September 2016, it was valued at $600. Even though I had fully delved into Blockchain and crypto learning since September that year, but the price fluctuations at that time did not seem much to me, therefore, I never tracked its prices for the first 6 months of my being in this space. I didn’t even know about Coinmarketcap or Coindesk in those early months.
I too joined the speculation of prices in mid-2017 when Crypto had begun to be a little popular among newcomers.
Hyperinflation
Last year when the price of Bitcoin started rising from $4000 onwards in October, no one exactly had the clue to why the prices were increasing so fast. In fact, I had anticipated the price to remain either stable or dwindle because it was the time after the famous Bitcoin hard fork, which had resulted in the creation of a new Bitcoin, Bitcoin Cash. And at that time the discussion regarding the Bitcoin scaling solutions was on peak among the Blockchain tech community. The transaction speed and fees had been a major problem hindering the mass crypto adoption.
The merchants were not motivated to accept payments in crypto because of slow transaction speed and high fees.
The developers were bringing about scaling solutions like lightning network, Schnorr signature, block size increase etc, to solve the issues of scalability.
While these problems were already causing hindrance in Bitcoin adoption by merchants all over the world, but suddenly the market turned bullish. Bitcoin including all cryptocurrencies started breaking their ATH price records daily. Simultaneously projects started launching their ICOs raising huge money, in millions of dollars.
ICO became a trend and gave rise to numerous scam projects, Telegram groups for trade signals, coin Airdrops started becoming popular.
The projects with just a white paper and a website had raised 10 million dollars and above amount in their ICOs.
Anyone could build a token on Ethereum Blockchain and launch the ICO with a website and a well written (mostly copied) White paper. It was that easy.
New investors who had just heard about the crypto and the huge profit potential, started investing in Cryptocurrency, ICO, trading etc.
Suddenly Ripple became popular for investment purposes, even more than Bitcoin and Ethereum, among the new investors.
At that time it seemed like there was no problem called transaction scaling and fees. And according to the crypto media and new ICOs, Blockchain was going to solve all the problems in the world.
The fundamental issues in crypto had not been solved yet. Consequently, the merchant or user adoption of crypto were also halted apparently. But still the prices of crypto were rising, market-cap touched behemoth record of $900 billion with Bitcoin at $ 20,000, Ripple at $4 and Ethereum at $1300- not all simultaneously. The prices would have peaked much higher if the crypto exchanges would not have closed their new user registration portals just before the bull run, due to the huge unexpected traffic of users. Hundreds of people in my contacts alone were unable to create their accounts on any exchange to buy or trade the "easy money making" Cryptocurrencies.
Then no one knew where the prices will stop and when. Then came the downfall and everyone started blaming big whales for price manipulation. The whole market was at one point in time, waiting to see $25k and $30k Bitcoin price targets. But after a year now, everyone has perhaps forgot those targets and it looks funny today how all were targeting those prices without contemplating over the fundamentals for the price stability.
Since the price drop had begun, till today, the crypto market has flushed out almost all the weak hands, easy money grabbers, noobs, investors who can’t research for their investments etc.
If today you are reading this article then you are a true crypto believer and understand the philosophy behind Cryptocurrency. You have the guts to fight back the FUDs and noise in the world. It shows you are resilient in nature. All those weak hands must have capitulated till now and they don't have hopes of recovery.
The media regularly quotes the current price drop in percentage against the ATH prices.
Thus Bitcoin price is nearly 80% lower today than its all-time high price. But I feel this is not the correct way of comparison. In fact, $20,000 price of Bitcoin was the result of Hyperinflation. The prices of Bitcoin and other Cryptocurrency today may be the actual value for what they are worthy of. The true quote should be at the time of ATH, that the prices were 80% higher than the actual value of the coins. And now the market has corrected itself to its original worth. Still, no one would be sure where the prices will move next, higher or lower, because its a free market after all.
But the basic concept remains the same, that when the adoption will increase, the value of that asset will automatically increase.
What is the future of Cryptocurrency?
According to data on the research of Cryptocurrency awareness in the world, today about 20 to 30 million people are aware of the Crypto or Bitcoin. Before the last bull run, it might have been around 5 million people in the world. So today merely 0.5% of the world population of 7 billion, is aware of this technology. In coming years the awareness of crypto is anticipated to increase exponentially to at least 100 million people in not very far future.
In 2017 the most important constituent of the bull run was the ICOs. And to enable ICOs, Ethereum had provided the most innovative tool called Smart Contracts. Believe it or not, but Ethereum's smart contract feature had most significantly triggered the 2017 bull run. In November 2017, there were 324 ERC20 tokens built on Ethereum blockchain, out of total 409 tokens available at that time.
These days I feel there are lots of infrastructure developments in the Blockchain technology, on the peak high. The industry is much more matured and ready to accommodate the future influx of new users. Lots of exchanges have come up in this year to make buying and trading crypto easier.
Though usable platforms, dApps etc are yet to be surfaced out, undoubtedly the number of projects and people working on tech development are a lot higher than a year ago. Big corporations like IBM, Microsoft, Google, Mastercard, Bank of America, JP Morgan and many more have started exploring Blockchain technology. The governments around the world are under extreme pressure to bring regulations for the crypto assets. Few countries have officially acknowledged and accepted Blockchain tech and cryptocurrencies like Malta, Estonia, Belarus, Japan, Venezuela etc.
Bitcoin had been declared dead more than 300 times in the past when it's market cap used to be under $10 billion and a very negligible amount of people knew about it, but it survived every time. And now is the most improbable time for it to fade away as even a state government in the US, Ohio has just declared that it will accept the taxes in Bitcoin.
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