Will there be a spring thaw for Bitcoin after this prolonged Crypto Winter or are the critics right that this is the end? Here are three reasons why you shouldn’t count Bitcoin out just yet.
At the time of this writing, Bitcoin is trading at around $3,207 – its lowest price in almost a year and a half. The rest of the cryptocurrency market is similarly depressed, with all but one of the Top 20 cryptocurrencies firmly in the red.
With no immediate price reversal in sight, it might be hard to stay optimistic about Bitcoin – but here are three reasons why you should.
Reason #1: We’ve Been Here Before with Bitcoin
Newcomers to cryptocurrency haven’t been around long enough to remember, but we’ve been through this before – many times, in fact. The table below shows all of the crashes where the price of Bitcoin fell 30% or more.
|Start Date||End Date||# of Days||High Price||Low Price||% Decline||$ Decline|
|Jan 12, 2012||Jan 27, 2012||16||$7.38||$3.80||-49%||-$3.58|
|Aug 17, 2012||Aug 19, 2012||3||$16.41||$7.10||-57%||-$9.31|
|Mar 06, 2013||Mar 07, 2013||2||$49.17||$33.00||-33%||-$16.17|
|Mar 21, 2013||Mar 23, 2013||3||$76.91||$50.09||-35%||-$26.82|
|Apr 10, 2013||Apr 12, 2013||3||$259.34||$45.00||-83%||-214.34|
|Nov 19, 2013||Nov 19, 2013||1||$755.00||$378.00||-50%||-$377.00|
|Nov 30, 2013||Jan 14, 2015||411||$1,163.00||$152.40||-87%||-$1010.60|
|Mar 10, 2017||Mar 25, 2017||16||$1,350.00||$891.33||-34%||-$458.67|
|May 25, 2017||May 27, 2017||3||$2,760.10||$1,850.00||-33%||-$910.10|
|Jun 12, 2017||Jul 16, 2017||35||$2,980.00||$1,830.00||-39%||-$1,150.00|
|Sep 02, 2017||Sep 15, 2017||14||$4,979.90||$2,972.01||-40%||-$2,007.89|
|Nov 08, 2017||Nov 12, 2017||5||$7,888.00||$5,555.55||-30%||-$2,332.45|
|Dec 17, 2017||ongoing||363+||$19,666.00||$3,183.48||-83%||-$16,482.52|
The worst crash in Bitcoin’s history to date occurred in late November 2013 and was caused by a combination of the Mt. Gox crypto exchange hack and the PBoC (People’s Bank of China) denouncing Bitcoin as a cryptocurrency and barring financial institutions in the country from any involvement digital currencies.
That particular Crypto Winter saw Bitcoin lose 87% – more than $1000 – of its value and lasted 411 days. A lot of people were convinced that it was the end for the cryptocurrency, but despite the theft of 850,000 BTC in the Mt. Gox hack and China’s disavowment, Bitcoin not only recovered – it flourished.
In fact, in every single crash shown above, Bitcoin not only recovered, but went on to surpass its previous all-time high (ATH). So if past performance is any indicator, Bitcoin is due for a recovery once this particular crash has run its course.
Reason #2: Bitcoin Critics are Frothing at the Mouth
Bitcoin critics are having a field day right now, sounding the death knell of the digital currency, clucking their tongues like bitter old biddies, and telling us all “I told you so!” If any of them were to be believed, in 2018 alone, Bitcoin has “died” more than 80 times.
So why is this a good thing?
This is just my opinion, of course, but the critics are getting louder and more vehement because they are getting desperate.
Many of them – including Senate darling Dr. Nouriel Roubini – have been dining out on their vocal and very public nocoiner status for months, even years. They have to keep doubling down on the criticism because to admit that they were wrong would damage their reputations and credibility at this point.
So the next time that one of these critics starts squawking about Bitcoin crashing and how we’re all dupes for believing in it in the first place, just remember that inside, they are hoping like hell that they won’t be proven wrong and wind up a laughingstock in financial and economic circles.
Reason #3: Mainstream Interest in Bitcoin Continues to Grow
You would think that with falling prices, Wall Street and other mainstream businesses would want to distance themselves as far away from cryptocurrency – especially Bitcoin – as possible, right?
Consider just a few recent forays into cryptocurrency by mainstream financial players:
- NASDAQ has confirmed that it will list Bitcoin futures on its exchange as early as Q1 2019.
- ICE, the parent company of the New York Stock Exchange (NYSE), has a target date of January 24, 2019 for the launch of its digital assets platform, Bakkt.
- Goldman Sachs-backed Circle acquired crypto exchange Poloniex in February for a reported $400 million.
These companies have no doubt done their due diligence and are spending hundreds of millions of dollars to have a foothold in the cryptocurrency marketplace. To my thinking, they wouldn’t be taking that kind of financial risk if they thought crypto was on its way out.
Of the three reasons listed, this one is probably the most telling. Interest in Bitcoin – and crypto in general – is not waning. It is growing.
So stay calm, keep the faith, and don’t be swayed by the FUD. I truly believe that great things are on the horizon for cryptocurrencies.
Do you think that Bitcoin will recover from its current slump? Why or why not? Sound off in the comments below.
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