Is Bitcoin in a year long down-trend like in 2014 or is it recovering and reaching new heights?steemCreated with Sketch.

in #bitcoin7 years ago (edited)

When speculators try to make predictions about Bitcoin and cryptocurrency in general, they look at the past and attempt to extrapolate some kind of pattern for the future. Many events like the peak of 20k in December 2017 and short price collapses during the chinese new year celebrations have been predicted that way. But can the past tell us something about the current situation in 2018? Will it be like 2014 or just another, bigger version of the uptrend in 2017?

The price of Bitcoin is going up. As i write this article BTC is trying to break the 11.5k barrier, but in general it is still more than 40% down from its all-time high of 20k in December 2017. Cryptocurrency analysts and investors are still afraid, that we are in a post-bubble downtrend. Many look at 2014 and ask: "What if we go in a 2-year-depression like back then?" It is true, that BTC went down from a pretty high peak in 2014. It went down for the next 1.5 years and only after that time it recovered to reach new heights. But why did it go down in the first place?

Well, the biggest exchange for BTC in that time was Mt. Gox. It handled over 70% of all BTC transactions worldwide and was the largest Bitcoin trading platform. Mt. Gox is now part of BTCs ancient history. Mt. Gox was hacked and exploited in 2014. Nearly 850,000 BTC, which was more than $450 million at the time, went missing. Mt. Gox suspended trading in February 2014 and filed for bankrupcy protection. Nobody has stated a clear connection back then, because Bitcoin went down and recovered soon after, but the damage was done and looking at the charts and seeing those numbers it is pretty clear, that many investors lost trust in BTC after that. Even though other exchanges where picking up, where Mt. Gox left the stage, the damage was showing in the months to come.

So, to come back to my original point: Should we be afraid, that BTC will go into several months of down-creeping or should we rather listen to those, who say 2018 will be the year that BTC becomes truely mainstream and will reach 40k to 80k? The reason for the depression back then was not that BTC had reached a peak, but its vulnerabilities. And they stemmed from being still too centralized and easy to attack. Today BTC faces other attackers. The broader acceptance is slowed down by international government regulations and outright bans for cryptocurrencies. To be honest, I don't know what will happen this year, but i am optimistic and it is always helpful to look at history, to get some perspective.

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That is the billion dollar question

very good! Please upvote and follow me.@mdyousuf

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