Professional crypto trader Bill Adams gives a detailed explanation of Bitcoin’s key features, sharing his insights into the currency’s current state and the future potential it holds.
Some have called Bitcoin a fraud and others have suggested that cryptocurrencies are in a bubble that will eventually burst. This is 2018 and Bitcoin is still breathing, holding on strong and making us believe.
The Bitcoin maniac engulfed the world as bitcoin price reached an astronomical level. Seven years ago, you could buy one Bitcoin for 10 cents, but by the end of 2017, it cost more than $18,000. Now the price is dangling around $6000 to $8000 and the question ‘will Bitcoin rise in 2018’ is still in the mind of many investors.
What is Bitcoin and Why Is the Price so High?
Bitcoin is a digital currency, and you can use it to buy and sell things. It has key differences to the real cash. First, there are no coins nor notes, Bitcoin exists only online. Second, there are no government or central banks controlling the supply of Bitcoin. Bitcoin is produced through a system known as mining using supercomputers.
The transactions are then stored in a system known as Blockchain, which is held in a thousand different places for security. Some people believe Bitcoin will one day replace traditional money. They argue that the actual value of Bitcoin is yet to be seen.
Now you can use Bitcoin a lot more than you used to. You can buy software from Microsoft, a holiday from Expedia, even invest in real estate, but it is still a long way from being mainstream. Why is Bitcoin price so high?
The recent surge in cryptocurrency crisis has coincided with the flooded interest in the blockchain technology behind Bitcoin. Blockchain Uses a decentralized and public ledger of transaction that cannot be manipulated. The measure of security and anonymity it offers made it popular as more investors stocked as many as they could, refusing to sell. This sparked a high demand for Bitcoin causing the price to rise stratospherically. Hype and news also triggered the high price of Bitcoin, most of which went viral on social media.
Can Bitcoin Price Spike Again? Will Bitcoin Rise in 2018?
Well, the answer lies in the current state of Bitcoin.
So far, Bitcoin has been a victim of his own success. Its popularity is based on the fact that one day it will be widely used as a currency. Bitcoin’s current state has made it far from being a currency.
Money Should have its value so that when you go shopping, you know roughly how much Bitcoin you will spend. But Bitcoin has been going up or down from 10 to 20% in a single day. Making it impossible to put a reliable price on anything.
Such huge spikes in price make users wonder whether to go shopping with it. Why hand over your bitcoins today when it can be worth more tomorrow? This may not matter in a short-term, but as more people invest in Bitcoin, the price may just go higher. However, in the long term, if the currency is not doing what it is designed to do, the Bitcoin bubble may just burst.
Many investors have sat on the sidelines as because they see cryptocurrencies as too volatile and do not have the same safeguard that most financial assets do.
The good news is several hedge funds, however, are investing in cryptocurrencies. Other companies are stepping up efforts to bring cryptocurrencies to the mainstream. They are opening regulated exchanges and creating futures contracts. IBM, Microsoft, and Toyota have all invested in blockchain, developing potential applications, ranging from food safety to driverless cars. So what is preventing even more widespread adoption?
It may be due to regulation or the lack. In July 2017, the SEC announced that federal security flaws may apply to some cryptocurrencies, without providing concrete guidelines to determine which ones. This made investors scared, and they sold their Bitcoin. While a lot of investors love anonymous transactions, most governments detest it.
Meanwhile, China has banned ICOs or initial coin offerings along with the exchanges where coins are traded. Guidelines for miners of cryptocurrencies also differs as countries like Venezuela going as far as putting miners in jail. So what is next in the year ahead?
Bitcoin is difficult to predict in the long term. Everybody wants to say where the price is heading in the next 1 year or 5 years, but not that easy. Many have compared the current state of blockchain to the early stage of the Internet. A digital wild west beaming with opportunities and just like the Internet, there will be winners and losers.
What Were Some Bitcoin Price Predictions in 2018?
Founder of McAfee securities, John McAfee, predicted that Bitcoin price will push higher this year. “Bitcoin will increase 10 times in price in 2018,” he said.
Saxo Bank predicted that Bitcoin will rise above $60,000 in 2018 before it crashes.
These are just two examples of the many predictions we read this year. While many investors worry over the Bitcoin price in the future, traders are making money from its volatility. You should do the same. No one can say for sure where Bitcoin is heading. All we can do is find a nice exchange platform or a Bitcoin broker and trade.
Bill Adams has been into currency trading for over 5 years. After taking a short course about Forex and Cryptocurrency, he decided to put his knowledge to good use as a writer and trader at TenkoFX. His Educational background in Business Administration and Economics has given him a broad base from which to approach Forex and Cryptocurrency topics.