From January 1st to June 2019, Bitcoin surged from a low of $3.7K/BTC to a high of almost $14K/BTC before dropping back down to lows of $8K-$9K in July 2019.
At writing, the BTC price has stabilized (relatively speaking considering BTC’s extreme volatility) and is trading in the $9.7K-$10.7K zones.
Bearish investors claim that the Bull Run is over and that we are headed for further lows while the bulls argue BTC is at a tipping point. The bulls’ case is hard to refute given the fact that BTC is still up 170% since the turn of the year and up close to 3000% since November 2015 (when BTC was selling for $327).
So who is correct in their assessment?
As always, it is impossible to predict the future but I will stick my neck out and say that the Bull Run has only just started. The recent drop in prices is a healthy correction that will pave the way for a surge in price in the coming months and years.
Indeed, the 2020 halving is less than a year away and the subsequent decrease in mining rewards should prove bullish for BTC.
Indeed, BTC’s crypto market dominance is close to 70% as altcoins are finally paying the price of too many shady IPOs and dubious projects that have fleeced investors of their hard earned cash.
Ultimately, BTC is trusted because (1) it is encrypted and backed by Blockchain, (2) has servers all over the world and over ten thousand nodes keeping track of all transactions and (3) the ledger is public and all transactions are irreversible.
Many cryptocurrencies have tried to copy these characteristics but none have come close to seriously competing with Bitcoin.
As always, patience is key and the intelligent investor should remember the famous adage that “time in the market beats timing the market”.
Also, look at the long term development of the world economy: As we progress to a digital and cashless future, Bitcoin has every chance of becoming the currency or at least the store of value of reference.
Many institutions will create coins to compete with Bitcoin, the latest being Facebook, but even mega corporations with seemingly unlimited resources will struggle for relevance in an age where privacy and decentralization are the main concern.
Disclaimer: This is not financial advice. Please do your own research before investing in cryptocurrencies or any other financial asset. Bear in mind that cryptocurrency markets are highly volatile and can lead to the loss of part or all of your portfolio. Exercise due diligence and do not blindly follow the advice of people you meet on the internet.