Bitcoin went low, low, low. Is this the Bitcoin Depression?
FILE PHOTO: Sparks glow from broken Bitcoin (virtual currency) coins in this illustration picture. Photo: Reuters
Unbelievable day, 16.01.2018.
As I am writing this post, Bitcoin has dropped massively from yesterday, by more than 25%, reaching a value of just under 11.000$. It’s crazy how volatile cryptocurrencies can be, and today is another example of just that. It only adds another layer to the unpredictability of the market and how, in just a few hours you can go the reverse way, from hero to 0. However there is a catch. As we said in previous posts, it is very hard to predict the evolution over time, of a cryptocurrency, especially in the mist of factors that were not there before.
We are talking about political factors that can drastically change the course of a crypto. This is what happened today, as there are concerns that South Korea might ban Bitcoin trading, as well as other cryptocurrencies, the government having this matter under review. While there are no clear answers, it is speculated that the institutional power has on it’s agenda to at least introduce a set of regulations that will make the market not decentralized, even going as far as suggesting that anonymity be replaced with the actual names of the ones that are trading. Not very good news from there. Not good news at all.
However, there has been a large amount of people from South Korea, signing petitions in order to pursue the government to take no actions. Even if this succeeds, and there will be no ban, another nail in the coffin of the crypto is that there is precedent. A country, with a large population of crypto traders, has taken a point to ban cryptocurrency. This might lead other countries to do the same and the results can be devastating for us. The fear will lead many to trade away their assets, just like we saw today, and the market will plunge down. Or will it?
Even if we have more than a thousand cryptocurrencies, one thing has become clear. If Bitcoin goes down, so do most of the rest. According to CoinMarketCap , out of the top 100 cryptos, 99 registered various degrees of drops. That’s 99%. It just shows how the influence of Bitcoin is beyond its market price. It’s so much more. For now. We are saying for now, because there is more and more interest in other types of cryptos that could, one day, take over the crown from the big boss. But until then, there is more to go, much to endure.
But we are confident that this shake-up will only make it stronger. As we are speaking, there are probably some speculators out there, thrilled that the price has dropped so that they can invest more. And this is not necessarily bad, as it will help the price up.
Regardless of what will have, we got one crucial piece of information, one that had been missing before: data. Yes, now thanks to these news, we collected data about the impact of possible regulations. We can add this into our statistical analysis and improve the accuracy of our predictions. Knowledge, the invaluable ace we are holding, will help us better prepare for the future and finally crack the secrets. Just like taking the trip to Super Bowl and loosing, you learn from the mistakes, in our case, we gather new data, and you go on and win the next, and for us, we are going to forecast the prices better.
Although this can be seen as a black day for Bitcoin , we are confident that his is not a Bitcoin Depression, and in some weird way, we are thankful that this happened. Now we can enhance our algorithms and expertise and construct bigger, better, stronger predictions. Stay tuned, as in the next days, we will publish a new 2018 forecast for the evolution of a cryptocurrency. Can you guess which one will it be? Let us know in the comments bellow. 🙂
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