Bitcoin: a long-term investment or an everyday currency?
Even though Bitcoin is no longer a brand new thing in terms of new technologies it is still very much in its infancy. When we look at the crazy bubble at the end of 2013 when the Bitcoin price rose from $120 to almost $1200 then yes, some might say that the “good days” are over. But to be honest inflation of this level cannot be sustainable. The Bitcoin price has fallen significantly since then however is that really a bad thing?
Stability of the Bitcoin price
Looking at what the Bitcoin price has been doing for the past year, we can say with confidence that it has stabilized. It has established strong support and resistance levels and keeps testing them. As a day trader I can say I prefer trading with Bitcoin now that I can predict the price movements better than for example a year ago. Also as the lows stay at the support level just under $200 – that is also a good opportunity for a slightly longer investment. You can with confidence invest for a few months and expect the price to return to the resistance level of around $300.
Is the price relevant?
Now a lot of sceptics still say that the Bitcoin bubble is over. Yes, the price has fallen nearly a $1000 since the end of 2013. But does that really mean it’s over? Let’s look at some more important data. With more than $800 million venture capital investments into Bitcoin or blockchain-tech startups since 2012 speak a different language. Even more the investments keep growing every year. The venture capital investments have increased 51% since the end of 2014. Also the number of countries that received VC investment also grew from 18 to 22 in the first quarter of 2015. If we look at this data Bitcoin is just getting started. And to be honest the current state of the price is not important. Just recently the giant IBM has also gotten into blockchain. You can have a look at some data here.
The future of Bitcoin
As more and more large companies and investors get into Bitcoin the faster it can grow and develop. If we compare this to the dotcom bubble the investments are considerably greater. People said the same thing about the internet back in 1995. Some of the comments were: This is something for geeks and will never make it mainstream. Who would possibly use it or benefit from it? And look at us now. My grandfather reads his newspaper and pays bills online. Could we even imagine a world without being online on a daily basis?
Investment or currency?
In my opinion Bitcoin and other cryptocurrencies are just getting started. I’m sure the world will be a very different place 10 years from now thanks to the innovation that blockchain has brought us. So how should we be looking at Bitcoin ? An investment or a currency. Why not both? Every day new merchants add Bitcoin as a payment option. You can purchase multiple goods and services with your coins. On the other hand as the technology develops the demand for Bitcoins will rise. With that we will see a rise in demand and the Bitcoin price, making it even a better investment opportunity.