Could Bitcoin Prices Go Back Up to $19,000?
In late 2017, no matter who you spoke to, they talked about how Bitcoin (BTC) was going to be the next big thing. Some even started to call the cryptocurrency the “new gold.”
If this wasn’t enough, we started to hear totally out-of-this-world calls for where Bitcoin prices could go; we heard about a price target of $40,000. A few even forecasted a price target of $1.0 million.
Well, if someone bought into the hype, they could be regretting their decision at this time.
Why? From their highs of around $19,000 in late 2017, Bitcoin prices have crashed by more than 50%. At the time of this writing, Bitcoin was trading around $9,000.
To get some perspective, see the chart below. It shows daily Bitcoin prices.
Chart courtesy of StockCharts.com
Where Do We Go from Here?
Going forward, it’s important for Bitcoin investors to know a few things…
First, remember that whenever anything goes up in value almost vertically, it’s never healthy and definitely not normal. Bitcoin prices in 2017 soared exponentially. It became a speculative haven. So, this sell-off is very understandable. A lot of people got involved, and when their expectations got disregarded, they ran for the exits.
Second, there are better alternatives to Bitcoin. Don’t take it for granted. The cryptocurrency’s name became mainstream because it was the first one in existence. That’s all. Its usability is limited.
Last but not least, pay close attention to the technology that all the cryptocurrencies are based on. Blockchain technology could revolutionize the way we do a lot of things. It could make tasks more efficient, faster, and more secure. Don’t mistake Bitcoin for blockchain technology.
Price Target for Bitcoin in 2018
Sadly, as Bitcoin prices have come down, there’s still a lot of noise that says, “Oh, this is normal. We have seen downturns in Bitcoin before.”
Yes, the cryptocurrency has seen major moves down before, and then the price bounced higher. But it’s important to keep in mind that Bitcoin wasn’t as mainstream back then. Now it seems as if everyone owns it, so the decline takes a toll on investor sentiment. Investors may think twice before buying again.
Furthermore, keep this in mind: regulations could kill Bitcoin in an instant. The cryptocurrency space is still like the Wild West. No one is clear on how taxation works, nor on whether Bitcoin is even considered an asset. Over the past few months, we have seen countries come out hard against cryptocurrencies, and they usually name Bitcoin as their first target.
Dear reader, it’s important to be rational when everyone else isn’t.
Could Bitcoin reach $19,000, again? There are a lot of roadblocks on the way for that to happen.
Here’s what I will end with: if Bitcoin is something that an investor is willing to put some money toward, it may be wise not to go overboard. Only a small portion of an investor’s portfolio, if any, should be allocated to Bitcoin. Understand this: if Bitcoin prices do make a move to the upside, a small allocation could improve returns by a lot. But if the price drops, having a small allocation means that the investor will not lose a lot of money.