Bitcoin Doom And Gloom Persists Despite Opposite Market Action

Mark Wallston on August 15, 2017

Bitcoin has been called a bubble ever since it hit $1200 per coin last January, yet only the exact opposite has happened in reality

Most newcomers to bitcoin think that it’s the news that matters, but cryptocurrencies function on a much more diverse set of variables, variables which are highly active, variables which the world of trading has never seen before. The very act of mining bitcoin is a game changer in and of itself, but let’s not forget that each cryptocurrency has unique properties that dictate how they function, many failing while others have become standard in various online communities, and of course there is the fact that there are entire economies around the world attempting to regulate the bitcoin, and all digital currencies.

Some believe the volatility of the price of bitcoin is due to market manipulation, but it’s easy to make conspiracy theories when you don’t have all the facts straight. The truth is that, while market manipulators clearly exist, their goal is to make money, not lose it. Plus, if they wanted to tank bitcoin, it would take billions of dollars to do it, and most billionaires don’t stick all of their money into volatile markets.

If you take a look at today’s speculation on bitcoin, you’ll see all sorts of shorts on Trading View and all sorts of longs in the crypto community. So who is right? Rarely do the two seem to see eye to eye and it’s most likely due to the fact that traditional traders speculate based on news and traditional trading patterns, especially the classic bubble pattern, while cryptocurrency enthusiasts are in for the long haul and envision a future where paper currency doesn’t exist any longer.

Since these enthusiasts exist, and since cryptocurrencies are created by users through mining, it’s more sensible to look at digital currencies as being here to stay, regardless of price. The enthusiasts (many of which have invested millions into full scale mining operations) aren’t about to drop everything and leave the scene, which gives an inherent support that no other currency or stock can match. Microsoft? Apple? Computer companies rise and fall. Cryptocurrencies, however, only rise.

Bitcoin Is Not A Bubble

The classic bubble has 4 phases: wise investors get in before anyone else, institutions jump in when signals show signs of early growth, the public gets in way too late when the price has already leaped significantly and, once the stock gets very significantly overpriced, the early investors start taking their profits in heavy numbers. That’s when everyone freaks out and sells, and you have your crash.

That isn’t the case with bitcoin.

Well, it is on a smaller scale — that is to say bitcoin “crashes” once about every couple of weeks, and perhaps you could call the 7 – 10% drops every few days “mini crashes” if you wanted, but looking at a 1 day chart for bitcoin in any major exchange, you’re sure to see only growth… unless you don’t consider $1200 – $4500 in 8 months “growth”…