As a highly prominent Cryptocurrency, the rally of Bitcoin caught so many users, enthusiasts and digital currency analysts by surprise. For almost the whole of the previous year, 2018, the crypto sphere has experienced issues of a bear market.
With this bear market, Bitcoin has significantly failed to remain at a price that is above $10000. Diverse investors, as well as newbies in the Cryptocurrency sphere, are beginning to lose interest as well as capitulate the Bitcoin market.
Meanwhile, there have been so many theories trending so far and making attempts to explain the cryptos resurgence. While some of the theories, as usual, were absurd, there were others that seemed highly viable.
Undermining the noise, however, there has been a renewed positivity making the rounds about this surprising increase. Nevertheless, Bitcoin is still considerably down, not minding the optimistic price action.
Due to the moving sentiment and high acceptance of the Cryptocurrency, the year 2019 may as well be the last year that so many people will legally have the means to purchase or trade a distinct Bitcoin cryptocurrency.
However, those who are extremely wealthy are excluded from this statement as they will be making the top 1%.
The Upside Of Bitcoin
As the Bitcoin virtual currency keeps persisting daily, the longevity and potentials of Bitcoin’s system’s proliferation are boosted.
Also, for reasons that may or may not be known, purchasing Bitcoin is practically unattractive until it gets to the point where it is tagged overvalued yet infamous when it finally crashes greatly from an all-time surge.
Basically, this was actively demonstrated in the year 2018 when the new highs were struck badly, and it led to an irrational and frantic market.
As at 16th December 2017, Bitcoin attained an all-time high, and its market capitalization was roughly $326 billion. This simply implies that Bitcoin would practically have to make an increase to its all-time high by closely three times to get to the $1 trillion mark.
Moreover, if this is reached, the recent Bitcoin price would surge more than eleven times from its current price. The current price as at 11th April 2019 was around $6000/$7000.
Meanwhile, with Bitcoin’s recent market capitalization, it is already shortened by regular asset classes.
However, as Bitcoin continues to acquire traction, most especially with its ever enhancing interest gains and fundamentals, breaching a $100k barrier may possibly be realizable in the nearest future.
Subsequently, there are people who have the belief in the crypto sphere that individuals should buy Bitcoin first before venturing into altcoins. This concept actually makes sense on some levels when one considers the following things about Bitcoin.
These things include:
· Bitcoin halving in which every four years it takes on the role of a price catalyst
· The maximum supply of Bitcoin is twenty-one million, and about eighty-four percent of this supply has already been mined
· Due to its scarcity, there is not enough Bitcoin for the globe’s thirty-six million millionaires
· Bitcoin is the biggest and longest existing digital currency, and it enhances stability as well as security
· The coin has always held its ground as the predominant virtual currency, and it currently accounts for roughly fifty percent of the whole Cryptocurrency market capitalization.
· The Cryptocurrency market has not decoupled from Bitcoin yet, and the price volatility of altcoins are greatly influenced by the movement and changes of Bitcoin
· It is the most popular digital currency, and it has the most ideal liquidity. With this, new users are much more likely to purchase it first before considering altcoins.
In the same vein, bitcoin is holding strongly at $5000, and with this, expecting a person to own a complete Bitcoin currency is frequently unrealistic. Nonetheless, plans like dollar cost averaging can also help in attaining the milestone of one Bitcoin.
Larger Move For Bitcoin
Even as the Bitcoin market has been reinvigorated currently, liquidity and amount are shifting to the upside. Additionally, the hash rate is also regaining its very own momentum, and it is in a trend going upwards.
Moreover, the powerful hash rate is important for diverse reasons such as:
· It demonstrates an increase in Miner participation, and it may as well be a testament to incredible confidence in regards to the state of the market.
· An increased hash rate indicates a bolstered system security
· An increasing hash rate is sometimes a precursor for higher cost changes as well.
What About Other Altcoins?
While some people will scoff at the concept or probably the idea of venturing into altcoins before buying any Bitcoin cryptocurrency, others have the belief that Bitcoin is a representation of a sizable percentage of Cryptocurrency users’ portfolio.
However, it is not a necessity to have one entire bitcoin before embarking on the trail of altcoins. Nonetheless, it solely relies on each users’ personal goals. Majority of the top altcoins have the possibility to outpace bitcoin’s return in the bull market.
Meanwhile, there is also a caveat, which is the fact that these altcoins signify a much bigger risk than strictly purchasing Bitcoin.
With the reinforcement of the previous year 2018, altcoins performed critically poorly when placed against Bitcoin at the bear market.
To Wrap It Up
No one should venture into buying Bitcoin with a blind eye or closed eyes; it is best to ascertain risk tolerance and make the decision on what is ideal for your Cryptocurrency journey.
However, bitcoin’s asymmetric payoff is highly immense to ignore the virtual currency entirely. A little volume into Bitcoin or some other digital currencies that are viable is highly likely to produce returns on investment that can be termed incredible in the years to come.
Finally, FOMO; fear of missing out has the tendency to make a comeback when the Bitcoin market starts pushing into newer and greater heights. It has the potential of causing a purchasing frenzy. However, the sad fact is that by then, it would be very late to reasonably hold on to a complete Bitcoin or even a Bitcoin split into half.
Author: Daniel Alcanja, CTO at Trio