Bitcoin Prices Could Drop Immensely in 2018
Bitcoin prices have increased significantly from their recent lows of around $7,000 to over $11,000 now. As it has found some life after a sell-off, we are hearing the bulls call for another run to the upside. Will the cryptocurrency hit its all-time highs this year?
Before you buy into the severe optimism and hope, it’s important to go back to the basics.
Investing 101 suggests that before you invest in a business or an asset, make sure it could survive for the long term. If it doesn’t, then it may not be worth it. Bitcoin is failing to prove if it could stay for the long term.
The first thing that questions Bitcoin’s future is the usage of the cryptocurrency. For Bitcoin to survive in the long term, it’s important that it gets accepted freely. Remember, it’s dubbed as a currency, and any currency is useless if it can’t be used to buy things. The U.S. dollar holds the status of reserve currency because countries, businesses, and individuals accept it and find the dollar to be an acceptable medium of exchange.
This is not the case for Bitcoin. Even the companies that tried to implement it as a payment method are moving away from it.
Consider Stripe, a payment platform that recently cut ties with the cryptocurrency. According to Stripe product manager Tom Karlo, “We’ve seen the desire from our customers to accept bitcoin decrease. And of the businesses that are accepting bitcoin on Stripe, we’ve seen their revenues from bitcoin decline substantially.” (Source: “Stripe will end bitcoin support because customers aren’t interested,” The Verge, January 23, 2018.)
Also Read: Is a Stock Market Correction Due in 2018?
Better Alternative Than Bitcoin
Know that there are better alternatives to Bitcoin.
For a bitcoin transaction to take place, it takes about an hour. There are other cryptocurrencies that offer much quicker times when it comes to transactions. For instance, there’s a cryptocurrency called Ripple; its transaction time is just four seconds. (Source: “Benefits,” Ripple, last accessed February 20, 2018.)
Also, be aware that there’s a limited amount of the cryptocurrency. There are only 21 million bitcoins, and more cannot be produced. Also, some of them were lost in the early years.
You see, speculators love the idea of small number of bitcoins around. It makes the cryptocurrency rare. However, low supply also makes it almost impossible to be a fully scaleable currency.
Bitcoin Prices Outlook For 2018
I can’t stress this enough: I truly respect the technology behind Bitcoin, specifically the blockchain technology. The future of Bitcoin, as I see it, is foggy at the very best.
In 2018, I will not be surprised if the Bitcoin price goes through another wave of selling.
There are a lot of estimates out there. I have seen as high as $25,000 in 2018. I highly suspect the cryptocurrency could make a move this substantial this year. If it does go that high, the sell-off could be much more severe this time around.