Back in the end of 2017, we saw a Bitcoin price unlike anything we had ever seen before. Reaching an unprecedented high of near $20000, many first-time investors threw their hat into the ring in order to try to capitalize on the uncontrolled growth of the world’s biggest cryptocurrency. Unfortunately, the Bitcoin price crashed in 2018, and while we’ve seen it bounce back, it’s still in a precarious position. What does the future hold for Bitcoin and the world of cryptocurrency?
Bitcoin fell below $6000 near the beginning of February – a massive crash from just a few weeks before. In a couple of weeks, it has since rebounded to over $10000, but the market recently took a turn for the worse, with cryptocurrencies across the board decreasing despite the fact that they had started to recover from the large crash. Many experts believe that the Bitcoin price will continue to climb throughout 2018. In the grand scheme of things, the Bitcoin price is magnitudes higher than it was at the same time last year – even after losing over 50% of its value in the last few months. It’s certainly possible that Bitcoin will continue to perform competitively moving forward, but there’s also a possibility that this recent downturn could be a sign of worse things to come.
At its core, the Bitcoin price is designed in a way that there’s no real way to tell what the price will look like moving forward. Financial experts continue to make predictions about the direction of the Bitcoin price and of cryptocurrencies at large, but time and time again we’ve seen the market defy expectations and rise and fall based off of rumors and speculation. As Bitcoin price is based solely off of speculations rather than something tangible such as a company’s performance, it’s difficult to get a sense of where exactly the coin will go moving forward. However, by keeping the way that Bitcoin value is influenced in mind, we can get a pretty good sense of what sort of changes will result in a rise or a fall. What we can’t do, however, is predict when those changes will happen.
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Part of the appeal of Bitcoin is the fact that it’s both easily accessible and able to be traded anonymously. For better or for worse, the world of cryptocurrency has enabled the average joe to get his start in investing – hoping to take advantage of a rising bitcoin price to turn a quick buck. Such easy access wouldn’t be a problem normally, but with a coin that is as volatile as Bitcoin, opening up the uninformed to such a risky investment has several governments and regulatory bodies around the world pretty concerned. The anonymity has also proven to be an issue for some countries, with concerns that cryptocurrency could be used to fund illicit activities relatively easily due to the difficulty of tracing the transactions. These countries’ concerns have led to regulation, and the Bitcoin price has not responded well to any sort of effort to control it.
Unfortunately, as the market cap for cryptocurrencies starts to grow into the hundreds of billions, these once-niche investments are becoming too big to ignore. What had started as a side project for the techie community has quickly become the hottest topic in the investment community, and financial regulators are starting to take note. For better or for worse, we should expect a world where the Bitcoin price and other cryptocurrency values are more heavily influenced by the enactment of regulation that brings them more in line with traditional stocks. The price will always be volatile, with spikes and crashes, but we may see a more negative trend if some of the major benefits of investing in cryptocurrency are to be removed.
Already we’re starting to see some regulation come to light that could really have a negative effect on Bitcoin price. Perhaps some of the biggest news came from China a few months ago, after the shuttering of one of the country’s biggest cryptocurrency exchanges had a marked effect on the Bitcoin price. The country has generally not been good about embracing these new forms of investments, with a recent ban on Initial Coin Offerings as well as rumors that they would soon increase taxes on Bitcoin miners – a major problem for companies that call Asia home due to the inexpensive utility prices. Other countries that have expressed their disdain for the lack of regulation involved in cryptocurrency trading include Israel, South Korea, and several regulatory bodies from the United States. Cryptocurrency is too big of a presence to be ignored, and the Bitcoin price may have difficulty recovering if this trend of increasing regulation is to continue.
While Bitcoin has now dropped below $10000, whether it rebounds or continues to fall is anyone’s guess.