Could We Just Be At The Beginning of a New Bull Run?
Mati Greenspan, the senior market analyst of the trading platform eToro, explained that Bitcoin could be starting a parabolic bull cycle. He said in this way during a recent conversation with Yahoo Finance. These comments come after a very positive year for Bitcoin that started with Bitcoin close to $3,400 and it has already surpassed $8,300.
Bitcoin Could Start a Parbolic Phase
Bitcoin dropped from $20,000 in December 2017 to $3,200 a year later. However, during 2018, the industry improved and become much more developed. This shows that Bitcoin experiences similar up and down moments in the market as years pass. 2019 seems to be a good year for Bitcoin to recover its price and start growing once again.
Mati Greenspan believes that the most popular digital currency will be experiencing a new parabolic run. He explained that the bear market that the digital currency experienced in 2018 was just one of these cycles. On the matter, he commented:
“We’re just part of a larger cycle. Bitcoin has gone through several cycles before these massive bull runs, we’re talking about 10,000 to 50,000 percent gains within a short period of time and then it has these massive retracements.”
He went on saying that these market retracements can be between 80 to 90 percent and that this shows why Bitcoin fell over 82 in just a year. In general, the market moves in large cycles that are positive or negative. There are some moments in which Bitcoin operates very stable and volatility drops.
In general, every rally after a large crash or correction tends to be very positive and even larger than the previous one. At the same time, the founder and CEO of Digital Currency Group, Barry Silbert, said that sentiment and technicals look great.
He agrees with the fact that after a large price drop, Bitcoin then grows even at faster rates and reaches new highs. Silbert commented that the infrastructure this year is different than in 2017 and this is expected to help the market reach new price levels.
At the time of writing this article, Bitcoin is being traded around $7,365 and it has a market capitalization of $130 billion.
Bitcoin’s New Bull Market Shows That Bitcoin Never Died
During the last few weeks, Bitcoin (BTC) has experienced an important price increase. The digital currency moved from $4,000 up to $8,300 in just a month, which is very positive for the digital currency. When Bitcoin fell from $20,000 to $3,200, people claimed that the digital currency was already dead.
Bitcoin Is Not Dead
Cryptocurrency enthusiasts are very excited about the future of the most popular digital asset after the price increase that the digital currency experienced last month. Bitcoin seems to have entered a new bull market and the sentiment in the crypto space is already showing this.
Dan Held, the co-founder of Interchange and Bitcoin investor wrote a tweet in which he mocked mainstream media saying that Bitcoin was a bubble the last few years.
Bitcoin in mainstream media:
2011 – “it’s a bubble”2012 – “it’s a bubble”2013 – “it’s a bubble”2014 – “it’s a bubble”2015 – “it’s a bubble”2016 – “it’s a bubble”2017 – “it’s a bubble”2018 – “it’s a bubble”2019 – “it’s a bubble”
— Dan Hedl (@danheld) May 14, 2019
Bitcoin has always had cycles in which the digital currency grew exponentially and then dropped over 80%. During these price corrections, individuals that didn’t like the virtual currency and never supported it called it a bubble that was already exploding. Nonetheless, this never happened.
With the last price increase experienced by Bitcoin, the digital currency is already over 100% up its bottom in December 2018.
Blocktown Capital has also written a Tweet in which they compare Bitcoin with the Tulip Mania and the South Sea Company. While Bitcoin registered a 10,000x increase, the Tulip Mania and the South Sea Company registered 40x and 7x returns respectively.
At the same time, Bitcoin has been in the space for over 10 years and it has billions of dollars in liquidity, The Tulip Mania and the South Sea Company had low liquidity and were between three and three and a half year operative.
Although virtual currencies are expanding, they have still a lot of potential ahead. Bakkt, which is a company launched by the Intercontinental Exchange (ICE), is still waiting for approval from the United States and regulatory agencies.
At the same time, the privacy-focused web browser Brave, is still far from the most used platforms in the world. There are still many things that must be improved by Brave before reaching mass adoption.
Companies that are working with Ripple are still not using the digital asset XRP. Moreover, banks and other financial institutions are testing Ripple’s services but they are also facing a lot of hard competition.
Clearly, there are many things that the market can improve and enhance for the future. However, Bitcoin seems to be growing and expanding. The Lightning Network (LN) continues to add new nodes and channels, and new wallets are created as well.
Thus, there is a lot of money entering the space that is helping the market to grow. This doesn’t mean that there are no challenges ahead. Indeed, the market needs to face and solve many issues before being able to reach mass adoption.
Bitcoin Surge Factors: Possible Determinants and Driving Forces Fueling the Price of BTC in USD to Rise
Before the current Bitcoin (BTC) surge, there was a significant drop in its market activity. BTC seemed to hit a decline, before it began to rise in the past couple of days.
The reasons why the price of Bitcoin (BTC) rose from below 4,000 USD to over 8,000 USD in less than 3 months will be explained here.
The Aristotelian Law
The Aristotelian law or the law of cause and effect states that “for something to happen, there must be a cause”, in other words, nothing occurs by accident.
This is a blanket principle for all aspects of life, finance and investment inclusive. Now, based on the Aristotelian law, we can say there must be certain factors or determinants that caused the current surge in the price of Bitcoin (BTC).
Bitcoin Mining Reward Halving
The fact is that the price hike in Bitcoin has no specific determinant, however, cryptocurrency analysts claim that one of the reasons behind this surge might be the halving of BTC mining reward scheduled to happen in 2020.
The occasional halving of BTC reward happens after every 210 thousand BTC blocks are mined. Based on past periods of BTC mining reward halving, there is always a significant hike in prices of the asset after the halving.
A good example is the BTC surge of 2012, when is rose to $1,000 following the halving.
In 2016, after another BTC halving, there was another great surge in Bitcoin price, where BTC hit $20,000. The possibility of another similar surge has attracted a huge amount of would be BTC investors.
Bitcoin (BTC) Halving Effect on Investors
The halving of Bitcoin mining reward from 12.5 to 6.25 with the same mining power will definitely be a huge disadvantage to BTC miners, which will cause them to increase their transaction fees which will in turn cause BTC investors to seek out altcoins with lesser fees.
Per the economic theory, low reward is mostly followed by low inflation and lesser crypto inflation will cause a price surge.
This analysis has caused BTC investors to buy and hold the digital asset in anticipation of the possible spike.
Four things to note during this spike period are:
- Investors should never rule out Bitcoin. As BTC dropped few years ago, it also bounced back in 2018 and spiked again this year.
- Not all spikes in BTC price has effects on other altcoins.
- The value of Bitcoin is as a result of several factors, and government policies are still not in BTC advantage.
- The event of the halving of BTC mining reward can cause the rise in the price of Bitcoin.
- Source: First Appeared Here
- Published Time: 2019-05-19 00:44:04
The views and opinions expressed in the article BTC/USD Value Updates, Beginning of a New Bull Run That Never Died do not reflect that of 48coins, nor of its originally published source. Article does not constitute financial advice. Kindly proceed with caution and always do your own research..
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