Volatility is expected to decline as the cryptocurrency grows. The past growth chart of bitcoin has shown sudden surges and dips in its price. As of today, it is a highly unpredictable growth chart. No one can say with confidence where the price will go in the coming future. Where one lobby calls this a bubble, there is totally opposite lobby those who do not hesitate to predict value of one bitcoin to reach 1 million U.S. dollars!
Regarding volatility of the bitcoin price, the cryptocurrency enthusiast terms this part of the process of bitcoin evolution. Compared with global stock markets, global currency, and global gold market, the bitcoin has captured only a fraction of those. These global players have been in market for quite a long time and are stable enough. Whereas the bitcoin is relatively a new entrant, though still with an impressive and unprecedented growth with a huge following already. In short, bitcoin is a junior compared with these (global mature) seniors.
Introduction of new cryptocurrencies that aim at getting rich quickly and flee overnight decrease faith in them for a newcomer. Since the time of government-issued currency during last thousands of years, there is no single global currency. Every country or government has its own variant. Similarly, expecting bitcoin to become a global digital currency is more of an imagination. Altcoins are bound to come up in such a decentralized environment, where monopoly has to go away, and control of own information must come back in the hands of a common man.
Again, media plays a great role in the value perception by the users or would-be users. Bad press induce fears among users. In particular, when Mt. Gox (then a popular bitcoin exchange) declared bankruptcy in early 2014, it created public panic. Also, when FBI investigations revealed bitcoin transactions toward drug dealing, this caused reduced rate of adoption by the users. Further news of security breaches dilute the interest of users. Bitcoin has its own share of security risks; those may appear due to ripples by the security fixes. Such negative press news is bound to create fluctuations, hence the volatility in the bitcoin prices.
The supply and demand theory in economics states that the rarer something is and the more in demand it is, the higher the price will be. Considering there are 21 million bitcoins, there are about 20 percent of the bitcoins yet to be mined as of mid-2018. The mining of 80 percent bitcoins have made the bitcoins scarce. This scarcity has contributed to the rise in the bitcoin price.
One wonders whether bitcoin will ever become stable enough. This is possible with the wider acceptance and confidence in it by the users. More user involvement, decreased transaction time and fees add to the value. Also, taxation and regulation by various governments pave a way toward legitimacy of digital currencies.
Am I Too Late to Invest in It?
“HODL!”Hodl is an Internet slang term used in the bitcoin community when referring to holding the cryptocurrency, rather than selling it. In a bitcoin forum message, a user incorrectly typed hodling in the place of holding. Since then, hodling got popular and synonym with staying invested in bitcoin.
Early investors in bitcoin became instant millionaires due to their early adoption. The question about being late in investing in bitcoin got asked at many stages of the bitcoin price say at 1, 10, 1,000, 10,000, or even at the peak of 17,000 U.S. dollars. The bitcoin price growth is very unpredictable. Still, there seem to be investors reaping profits, though those may not be comparable with what is already done during 2017. In short, no one knows if it is too late or not.
As the user confidence continues to increase, government regulations come into place, more retailers continue to accept bitcoin as a media of exchange, market capitalization grows, and then bitcoin is bound to have even more growth than today. At the same time, the absence of these factors can cause adverse effect as well.
Bitcoin may be considered for long-term investment, where one should only put that one can afford to lose, with a hope that the bitcoin price will eventually increase more one day.
Contribution to the post made by social media strategy blog
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