Bitcoin: The Return of The Volume
“Everything is going as I foreseen” is probably one of the most epic lines I can remember, not only because those words were spoken by the dark overlord ruling the galaxy just before his demise, but also because it mirrors so many brilliant human minds, when voicing their opinions on fields of which they are experts; of course bitcoin is no different:
“I’m sure of something, therefore (insert whatever prediction you think is right)”
–this article shouldn’t be taken as financial advisement as it represents my personal opinion and views. I have savings invested in cryptocurrency so take whatever I write with a grain of salt. Do not invest what you cannot afford to lose and always read as much as possible about a project before investing. You’re always responsible for your own money–
Most of you have seen this little, tiny, minuscule, almost invisible jump in volume that happen on the 12thApril 2018. So far, it has been the singular highest jump in volume ever seen as market cap went from ~ $270 Billion to ~ $300 Billion. It means around $30 Billion were added to the market in less than 3 hours.
Bitcoin’s dominance remains over 40% and I suspect it will continue to rise as most money that just entered the market should be institutional. There are some strong contenders, like Ripple, due to the nature of the backers (mainly banks and financial institutions).
Nevertheless, there are two ways of looking at this, in my own personal opinion:
- Either the money that just entered the market stays with the King, or
- It’s distributed among preferential projects (top-10 I would bet on).
Because there is currently a huge time gap between technological developments and price, meaning price moves due to pure speculation rather than technological advancements or issues that arise. If you think differently look at the examples of IOTA or Verge which have been hacked, however prices of both coins kept rising afterwards. Heck, think about bitcoin: when did the price hit its maximum valuation? At the same time fees were the highest ever.
Price is dictated by volume and what happened was a grand spike in smart-money coming into the market. Maybe some of the money that left at the end of January is coming back.
Should we expect the price to continue rising?
Some technical analysts believe price will continue to rise. Then again, the opposite might happen depending on many factors:
- Geopolitical tensions between Russia and the U.S. will most definitely shake-up traditional markets. This will no doubt influence the amount of money available to invest in the cryptocurrency market. I’m just not sure how this will affect all markets as at the end, there might be a surprising shift; people could begin to trust more in bitcoin due to its security, resilience and the fact it’s independent from governments and economies.
- Investors going short on bitcoin got destroyed and likely lost a lot of money. What can counter this is the CME Bitcoin contracts futures price, as I expect the futures’ volume to rise exponentially. Why? That’s easy: because it’s profitable for those investing in both markets.
- News sources. When many positive news start to arrive we usually see a growing euphoria and hype (check google trends) from dumb-money entering the market leading to massive price runs. I see no reason for this to be different this time. If history taught us something is that it “repeats”itself, going around and around in circles.
- Small technological hops (pun intended) will play a massive role in the long-term future, as bitcoin and other cryptocurrencies are being given time to prepare for adoption worldwide. Hopefully exchanges won’t need to block new hordes of users signing up, bitcoin’s lightning network will be fully operational and segwit adopted by most mining agents and trading platforms.
We cannot forget price is crucial to bring new people into the market, but to keep those users technology must answer today’s problems. People do not care if money is centralized, decentralized, distributed, digital, or physical; People care about:
- How can I get that money?
- How much do I pay to store and transfer that money?
For truly massive adoption either the bitcoin team thinks of a way to easily distribute it among where is needed, this is, in countries where banking is limited for example, or a benign group of people develops a way to distribute the currency directly to people in exchange for something, other than money (time, attention, services, etc). I understand those who think until this currency is used by business worldwide it’s a joke. I get it, I truly do, however if the purpose of this cryptocurrency is to bank the un-banked and to be successful in connecting communities worldwide by allowing anyone to transfer and store value over the internet, then maybe the right way to do this would be to simply find ways to trade bitcoin for time and services in those places.
–note: i did not mention the question “how long does that money take to get to another account?” as the current banking system needs 3-5 business days for international transfers to take place. When the bitcoin network is clogged, i have personally waited around 24h for a bitcoin transfer to get approved. It still beats the banking system for personal transactions, which is the final aim of this cryptocurrency (in my opinion)–
Easier said than done
The reality, of course, is that acceptance dictates the rules of the game; businesses have to start pushing cryptocurrencies by accepting them. At the end of the day for cryptocurrency to be used, all intervening agents must participate.
We must not forget there will always be two sides to the same coin:
- Should we focus solely on price and volume, to master our gains? Or
- Should we focus in improving technology scalability and marketing, to achieve worldwide adoption?
Doing one alone would be unwise as balancing both seems to be the right way for the market to grow. My only hope is that the entire community keeps improving the consensus in bitcoin (and other cryptocurrencies), never forgetting its true purpose:
To empower those who are financially invisible.
Featured image from Shutterstock.