Did The Media Miss Any Benefits About the Recent Mini-Dog Bark Market Rally Bitcoin and Crypto Assets Made?
After five quarters worth in Gregorian calendar wait, from December 18, 2017 when $BTC price reached its highest ever USD exchange rate value to-date of almost $20,000 at the exact time the bitcoin futures was launching, its been 481 days since that BTC ATH. Now, as we approach the bitcoin blockchain halving of mining rewards from 12.5 BTC to 6.25 BTC (plus transaction fees) we found ourselves nearly 400 days give or take 30ish on either side from most expert ranges. While it could happen as early as a year from today, anytime late April, all of May or early June seems to be the projected #flippeningmooninghappening
Bitcoin's recent price increase has sent a refreshing wave of newfound excitement throughout the crypto community and blockchain ecosystem. As fully expected, mainstream media starts knocking back on the crypto neighborhood's door and it says bitcoin on the doormat showing its 10 year history's strength and resilience to answering and weathering the future of finance doorbell. However when analyzing the coverage that has picked back up, it seems to be filled with 100% guesswork ranges of price predictions from industry experts that start stacking up fast. An appropriate assertion or rather insertion of ‘follow the money' always comes to mind but let's continue.
Bitcoin Price Rally Pulls It's Crypto Asset Siblings Up
There is no denying that by and large, the recent bull run is good for the crypto market. Although these price increases show us why this asset class is extremely unique. To understand this, first, we have to look into the supply and demand of Bitcoin when compared to other assets.
Let us take an example of gold. When the price of gold is higher, there is more incentive for miners to extract more. Through this, the supply goes up and the demand comes down bringing the price down with it. The same logic can be applied to the prices of oil and fiat currencies.
However, there is no correlation between the supply of bitcoin to its price. There is no “correction mechanism” as we had seen in the previous example. Increasing demand will increase the price which can go up indefinitely.
Bitcoin and the Fight for the Future of Finance
The buzz word that will get you in with the cool kids at the lunch table is decentralized finance. So the question that needs to be answered right now is what exactly is the correcting factor(s) in and for bitcoin. Most say the biggest one is its transaction fees and block size mining wars.
In the traditional system, a transaction must go through many trusted third parties before clearing. Each intermediary collects a fee from this service, adding up too often hefty sums that make smaller payments impractical. With bitcoin, there are no intermediaries in this sense. Transactions are peer-to-peer, meaning your money is sent straight from wallet to wallet. However, transactions have to go through miners in order for them to be added to the blockchain.
Now, when the transaction fees for miners become more lucrative more miners will get into the business and bring the prices down. It's a classic supply and demand problem. Currently, in its nascent stage, there are other factors that influence Bitcoin’s prices. This is what makes the bitcoin price halving scheduled to go from the 12.5 to 6.25 BTC mining rewards so pivotal and creates so much buzz within the crypto community because of its impact and significance. As stated, this will happen between April 2020 – June 2020 which puts it out about 400-450 days away by most calendars.
Bitcoin is Establishing Itself in the Economy, Like it or Not
One of the biggest barriers to entering the economy with an upright posture is government and legal regulations. Bitcoin is a decentralized currency, which means the government regulations that cover fiat money do not apply to it. Several governments, however, have started to implement laws to regulate Bitcoin. Depending on the regulations, they can cause prices to go up or down. Another one is the regular hacks because of failure to keep the technology secure.
So, in a sense, the crypto market did a good thing. Governments took their time to understand the technology, crypto businesses had ample time to build robust technology and investors had time to educate themselves better. This must have been how the beginning day's bartering evolution fulfilled itself.
While many will want to tell you that Bitcoin is “going to the moon,” be skeptical because this is truly an asset class that we have not seen anywhere before and investing is at your own risk even though the status quo around here is permabullion. The only way to safely state otherwise is if Satoshi Nakamoto answers the digital asset door, and where it says no Satishi Nokomoaros allowed.
Many experts are bullish on the future of where $BTC is going, and we are in the fourth major cycle of bitcoin price's pullback of 80-90% from all time highs only to spring forward 10-20x which would put bitcoin at an exchange rate value of $31,000 – $386,000 BTC/USD given that the low point was $3,100 December 2018 and highs of $19,300 December 2017. That only BEG's (wink) to question what the December 2019 bitcoin price predictions will actually be accurate and enjoyed but all of it's investors and supporters from around the world.
Live Bitcoin (BTC) Price:
1 BTC/USD =$9,191.0554 change ~ 3.83%