Bitcoin Bounces Back Again - Beginning Of The End... Or Bump In The Road?
Content adapted from this Zerohedge.com article : Source
A crypto-Christmas miracle? Bitcoin is now unchanged from the pre-Friday bloodbath, having scrambled higher for the last 24-48 hours as much of the world enjoyed a day off.
The entire crypto space is rallying once again today but the question remains, is this another dead cat bounce on the way to 'zero' or is Tom Lee, John McAfee, and Mike Novgratz right, this is a bump in the road to $40k and beyond...
As The Economic Collapse's Michael Snyder notes, Bitcoin, Ethereum, Litecoin and other major cryptocurrencies have been on a wild ride this year, and over the past 10 days the volatility that we have witnessed in the marketplace has been absolutely breathtaking. On December 17th, Bitcoin shot above $19,800 for a brief moment before it started plummeting dramatically. At one point the price of Bitcoin dipped below $11,000, which represented close to a 45 percent decline from the record high that it had hit just five days earlier. And Bitcoin was far from alone – virtually every other major cryptocurrency was also down between 25 and 50 percent during that five day period. But now almost all of them are bouncing back, and at this moment the price of Bitcoin is $14,219.99.
So where do things go from here?
There are many that believe that in the short-term the price of Bitcoin will fall back toward the actual cost of production. It has been estimated that the cost to produce a new Bitcoin is currently between three and four thousand dollars, and with the price of Bitcoin so high there is a tremendous incentive for Bitcoin miners to produce as many as possible right now.
But there are others that are convinced that Bitcoin could eventually go to zero…
Morgan Stanley analyst James Faucette and his team sent a research note to clients a few days ago suggesting that the real value of bitcoin might be … $0.
That's zero dollars. (Bitcoin stood at around $14,400 at the time of writing.)
To back up his assessment, Faucette made the following arguments…
- Can Bitcoin be valued like a currency? No. There is no interest rate associated with Bitcoin.
- Like digital gold? Maybe. Does not have any intrinsic use like gold has in electronics or jewelry. But investors appear to be ascribing some value to it.
- Is it a payment network? Yes but it is tough to scale and does not charge a transaction fee.
Faucette also pointed out that the number of online retailers that accept Bitcoin is actually falling. Five of the top 500 e-commerce merchants accepted Bitcoin during the first quarter of 2016, but now only three still do.
In order for Bitcoin to have a sustainable long-term future, it must become a real currency that is widely used, but many would argue that it is already being surpassed by better and newer options. In fact, one top cryptocurrency expert recent stated that the old Bitcoin network "is as good as unusable"…
Emil Oldenburg, the co-founder of Bitcoin.com – one of the world's largest sites devoted to the cryptocurrency – recently called the cryptocurrency the "most risky investment you can make," after he switched to bitcoin cash, which he considers to be the future.
"The old bitcoin network is as good as unusable," said in an interview with Swedish tech site Breakit.
That certainly doesn't sound promising, but so far that hasn't stopped the price of Bitcoin from heading into the stratosphere.
So far in 2017 the price of Bitcoin has risen more than 1,400%, and that number is extremely impressive no matter how you look at it.
Of course virtually all of that "digital wealth" could disappear in just a matter of days during a major crash. The CEO of Patriarch Equity, Eric Schiffer, believers that Bitcoin investments are eventually heading for "a thermonuclear death"…
"I think bitcoin is a 'tower of death,'" Schiffer says. "It is going to result in the imminent death of your investment – a thermonuclear death.
"Right now we are looking at a financial bubble that is bigger than the tulip craze and I believe that we are headed for a bitcoin crash that will supersede any financial worries of the 21st century," he added. "People are going to be shocked when they try to liquify their bitcoins."
Schiffer might be right.
After all, Bitcoin and other cryptocurrencies don't have any intrinsic value. Essentially, they are nothing more than digital creations that only have value because people think they have value.
But those that got in back at the beginning and have cashed out now have made enormous amounts of money, and nobody can deny that.
With every form of "investing", they are winners and there are losers. Unfortunately, those that chose to jump in at the height of the madness could end up losing very big. The following comes from Wolf Richter…
Betting on cryptos is a peculiar form of online gambling on a global scale that requires a consensus among participants that they only buy, and that you cannot ever cash out, and now that some folks are trying to cash out, the bets for everyone else are souring. The same dynamics that pushed prices up have reversed and are causing them to crash.
But what if the naysayers are wrong?
What if this current "Bitcoin crash" is just a bump in the road on the way to $40,000?
Years ago, the price of Bitcoin crashed 75 percent at one point. What would have happened if the early investors had all bailed out then instead of holding on until now?
Those that sold Bitcoin at $12,000 might end up really kicking themselves if the price of Bitcoin does hit $40,000 by the end of next year, and that is exactly what some top experts are projecting…
Billionaire investors and highly respected analysts including hedge fund investor Mike Novogratz, prominent financial analyst Max Keiser, and Fundstrat's Tom Lee stated that the price of bitcoin will likely surpass the $40,000 margin by the end of 2018, and achieve a $1 trillion market cap.
And let us not forget that big names such as John McAfee and James Altucher are predicting that the price of Bitcoin will eventually reach one million dollars.
To me, this is absolutely fascinating. On the one side, you have financial experts that believe that Bitcoin is going to zero, and on the other side you have financial experts that are projecting that someday a single Bitcoin will be worth one million dollars.
I don't know which side will ultimately prevail, but it will be a lot of fun to watch how everything plays out.
_Michael Snyder is a Republican candidate for Congress in Idaho's First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled "Living A Life That Really Matters" is available in paperback and for the Kindle on Amazon.com._
I heard this that Emil Oldenburg, the co-founder of Bitcoin.com – one of the world's largest sites devoted to the cryptocurrency – recently called the cryptocurrency the "most risky investment you can make," after he switched to bitcoin cash, which he considers to be the future.
"The old bitcoin network is as good as unusable," said in an interview with Swedish tech site Breakit.
This is exactly how I feel on the matter. I dont know about BTC, but I know about blockchain and blockchain will change the world as we know it.
Really? The miners determine the rate bitoin is produced? And here I thought the fact that it was written into the blockchain was what determined it.
No transaction fee....tell that to everyone sending bitcoin right now that are charged a fee of $20-$40.
So the old bitcoin network is useless but a new chain that handles 18 transactions per second versus 8 is the future? Oh boy.
The naysayers are either clueless or part of the establishment beating the non-bitcoin drum in hopes of driving down the price to get it cheap themselves.
The elites are buying bitcoin while the sheeple are scared away from it by the talking heads on TV and the Internet.
Gee, this is something different.
The part with the transaction fee is actually hilarious ! I think that the majority of people, who want bitcoin at 4-5000 $, want it there so they can buy. No one wants to be the loser, who missed an unicorn investment.
The current transaction fee's make the 'classic' Bitcoin basically unusable for the normal consumer.
A few months ago I could buy $80 worth of BTC to buy some extra Steem. Today the transaction from fiat-to-BTC service to the exchange would take up most of the funds by the transaction cost alone.
It's not worth it anymore, unless you are moving thousands of dollars. Which is a very risky venture for the average household.
Totally agree. There a lot better alternatives to move money around - STEEM for example is great for such purposes (and not only).
Great article I thoroughly enjoyed it... I hope BTC has another spike upward soon!
Bitcoin is up the most of the major cryptocurrencies, and this is most likely due to the resurgence of the plan to fork Segwit2x on December 28.
You should go look up and post which 5 retailers are on the list of those accepting bitcoin as per this article.
For some near-term outlook on bitcoin and crypto overall...
https://steemit.com/cryptocurrency/@harpooninvestor/buy-the-dip-not-yet-here-s-why
At the moment, for what I am seeing in a lot of trading telegram chats (including also 3000 members) and big facebook groups over 10k members no one cares about the 2x fork revival. No one speals about it. A lot of its supporters now are investing and working in Bitcoin Cash.
So baically 2x is unuseful - core supporters have segwith bitcoin and big blockers and people who want a Bitcoin without fees have Bitcoin Cash.
There is no place for 2x now.
ok, that's good info. So then what is driving the investment in bitcoin then? At least, on this day which is now in the past?
Bitcoin is a simply a better form of money. Once it has reached full scale, probably within 10-15 years, you'll be laughing at how we used to get our money from government. Why would you want USD when you can have a decentralized, limited, censorship resistant form of money? Governments will soon lose all power over citizens. Taxes will no longer be forced, they'll be voluntary, because there will be no way to enforce the tax code. What does that mean? Less bloat, no more entitlements, no more wars. I'm pretty sure my definition of capitalism is different than yours. Capitalism to me is absense of state. It is not simply privatization.
Bitcoin prices will increase further as Bitcoin is the future generation coins.
Great post. And yes I too look forward to gains in Bitcoin. Because that usually moves Steem higher as well.
supper post you share with us
hanks my dear