Bitcoin Keeps Falling Down: How to Deal With FUD And Avoid FOMO
Bitcoin has shown itself as a time-tested cryptocurrency that had suffered many different falls. Let’s remember that as soon as BTC managed to achieve the parity with the dollar in February 2011, in June the same year bitcoin rate, that reached $32, suddenly fell down in a couple of minutes to a few cents after MtGox exchange was attacked. Since then, bitcoin has crashed several times each year. And although the fluctuation in the first few years amounted only a few dollars, the percentage was much more palpable: more than 30%.
What did not bitcoin have to go through: numerous DDoS attacks on exchanges and the closure of major trading platforms, bans of Chinese regulators, the hardforks following one after another. However, bitcoin was recovering, and in 2017, which was recognized as triumphant year for the cryptocurrency, BTC reached its peak: it is well known that last year bitcoin grew by more than 1000% in 13 months, reaching a record high of $19,700. But investors didn’t have time to be happy with taking a break, as a sudden crash happened due to the numerous hacking attacks and regulatory bans. Thus, as a result, January 2018 was marked by a bitcoin rate fall more than 25%.
This event caused the heavy waters among the experts, and some of them spoke for the first time about possible conspiracy theories. Some experts calmly argued that the ”bubble" is inevitable with the emergence of any new financial instrument - before gaining a stronghold position on the market, it has to go through a sharp drop.
According to some analysts, bitcoin crash in January 2018 was not a coincidence, but rather the speculation of investors who concentrated 90% of cryptocurrencies in order to fix their profits. In addition, the January falldown has been observed several times, which suggests that this correction of assets was deliberate - before a significant amount increase during the year. And each time as a result of such fluctuations - the market becomes larger and washes out random and unprofessional investors who don’t know how to behave in conditions of high volatility, while major institutionals continue to buy bitcoin at a low price.
Bitcoin will survive - and keep falling down
We can assume that this is what is happening in the market now. Once the tendention was repeated, it becomes obvious - that’s not just a cyclical fluctuation of the market, but rather a clear and planned game of major players. However, as before, experts explain the current bitcoin rate falldown of different versions - the inevitable volatility, bearish trends, another inflation of cryptocurrency bubble and the entrance to the market of institutional investors. But what do ordinary traders have to do to save their funds, how to avoid the global panic.
The head of Genesis Trading, Michael MOREAU, notes that bitcoin has already experienced a 75% collapse more than 5 times during 10 years, and the current collapse of 79% in the last 11 months is not so fast comparing to the previous drops. So what does is mean? Should we just calm down and just ride out the current crisis?
Despite the fall of the cryptocurrency market, Chinese billionaire and OTC trader Zhao DONG, who made a fortune on bitcoin, believes that within three years the price of the first cryptocurrency will reach $50 000. In his opinion, although the bullish trend promises fast money, but if we consider the cryptocurrency as a long-term asset, “now is the time to buy bitcoin”. We decided to turn to our experts to find out how to behave in an unstable and very unpredictable days. Is it worth it to increase the investment portfolio or the longterm game may end in the big failure?
The ICO advisor and cryptanalyst Jonas ELHOLM, shared with Bitnewstoday.com his opinion, that bitcoin has taken a strong place in everyday life: as evidenced by a number of adopted laws from Malta to Japan. He believes that so far nothing tells about the imminent death of bitcoin. The expert explains the significant drop due to the trade wars between the US and China, and therefore sees a trend in a huge investments in asset classes such as gold and bitcoin in the near future: “We will definitely see a bullish trend again, especially when large institutional investors jump on this train. In addition, if the SEC accept bitcoin ETF, which we still expect, an enormous impact and price would spike for sure.”
Jonas ELHOLM compares the crypto market with the wild West, but hopes that the price of bitcoin won’t fall below $3000: ”I don’t know will it happen this year or next, but I am sure that bitcoin will take 53% of the total cryptocurrency market, and gain previous momentum and will again pass $5,000, and then $10,000 and continue the uptrend."
CEO of the Washington consulting agency Peter ROGERS shared in an interview for Bitnewstoday.com the belief that bitcoin is likely to fall below the rate of $3,000, and the beginning of next year, in his opinion won’t not be calm for the crypto market: “The recent launch of Fidelity’s crypto trading platform and custody solution, the proposed launch of Bakkt’s new physically-backed Bitcoin futures in January and the launch of Exchange Traded Funds (ETFs) will generate excitement in the market in early 2019” - the expert says. At the same time, he is optimistic about the introduction of new technologies, such as Lightning Network and Rootstock, which could help to overcome fears about scaling, fees to overcome concerns over scaling, fees and the single use case for bitcoin. Peter ROGERS believes: "I think there are good chances for BTC to reach the $20,000 to $25,000 by the end of 2019.”
Pour or buy?
Olinga TAEED, visiting Professor in Blockchain at Birmingham City University, also told Bitnewstoday.com that, in his opinion, it is highly doubtful that bitcoin will disappear, because there there are too many vested interested in it, although the same cannot be said of most other tokens. "If you imagine BTC was $500 in November 2016, even if it falls to those levels it means it hasn’t disappeared but merely stabilised at a more sustainable level. The view to buy now or later is very much dependent on whether you take a long term or short term foresight.”
As an example, professor cites the prediction of his friend, miner and investor Chandler GUO, who at the rate of bitcoin $500 in 2016 said that it will reach first $10,000, and then $1M. “His prediction of $10,000 has already been justified. Chanlder Guo, originally a meat packer in China, now lives in his gigantic home CryptoValley in California. I wouldn’t bet against him. I am saying that if you are a short term speculator then wait till it drops, but if you think it will get to $1m then it makes no difference what you buy it for” - says Olinga TAEED.
The founder of the consulting company in the field of blockchain services Stefan LAURENT also commented Bitnewstoday.com that now is really a good time for long term investments, although in his opinion, bitcoin has not reached the price bottom of $2500 yet, which Mr. LAURENT expects. At the same time, the expert says: “Within 5 years I believe there is a reasonable chance for bitcoin price to beat gold lingot”. Recall that 1 bar contains 400 ounces of gold, which today is $485,800.
Another our expert from the US, the consultant of institutional hedge funds and Bitcoin enthusiast Michael GRAUB fully supports this point of view: “If one has a 5-10 year time frame I think now is an excellent time to begin to take a long term position” - says the expert, perplexing by the fact, that people are used to buy things on sale, but avoid buying investment products that have fallen in price, so he adds: “I am on record that bitcoin rate could fall 90%. Scaling into bitcoin will always be the best way to take a long term position in Bitcoin as the cycles play out over time.” Michael GRAUB explains the fears of investors purely with psychological effect, which should not succumb.
Bitcoin's future
The General Counsel and Chief Compliance Officer of financial advisory company from US Charles CHRISTOFILIS in his comments for Bitnewstoday.com suggested that fluctuations of bitcoin prices are natural phenomenon for the cryptocurrency market. “It may be worth more and perhaps substantially more in the future, because people are using bitcoin and it is scarce while dollars are not" - the expert says and adds, that technological innovation is such that eventually a better, cheaper and faster alternative will make biitcoin obsolete.
However, not all experts see bitcoin as a future. The academic entrepreneur and co-founder of a quantum technology laboratory and international healthcare blockchain based company Amardeep SINGH shared with Bitnewstoday.com some categorical opinion, that the technology behind digital cryptocurrency is not finalized yet. The expert believes that cryptocurrencies are “worthless coins”: “Do you currently use bitcoin for anything that traditional cash or card cannot do? No - because the technology is not there yet - so the price will reflect the fact that people overhyped something they had no academic understanding of. Ironically it is these same people who say they are “liberating us from the bankers” yet are using the same devious tricks to take cash from investors in an unregulated market. I think the so-called experts telling people to invest are nothing more than sharks and charlatans.”
Amardeep believes that in the manipulation game mainly bet on the effect of "FOMO", forcing people to invest the last money. At the same time, he suggests paying attention to the fact that Charlie MUNGER and Warren BUFFETT, whom he considers as one of the most intelligent and successful investors,outlined the fact that Bitcoin as an asset simply does not create anything. Amardeep SINGH urges focus on improving the blockchain technology, not on participation in ICO or cryptocurrency trading, which makes a few people rich and does not change anything else: “Let’s hope a more heavily regulated platform such as the ones offering decentralised security offerings will put an end to what has been a million rubbish projects that could never deliver upon their promises” - the expert says.
And while analysts disagree about the depth or fall of bitcoin and about whether to pour or buy bitcoins, it was recently announced that Nasdaq had scheduled the list bitcoin futures in the first quarter of 2019. So, even if such a venerable exchange operator wasn’t afraid of the bitcoin crash, expecting a big hype to its new product, it becomes obvious that large players are not going to stop, and BTC has a good chances to become truly “gold”.