2017 without a doubt was the year of cryptocurrencies, particularly Bitcoin. We saw the year starting off with a bang and Bitcoin shooting past the $1000 mark, with no signs of slowing down. There was no arguing the fact that this new tech had come to stay, and was probably the next big thing to invest in. Several YouTubers, crypto enthusiasts, and so-called experts predicted a run up to $50,000 and even $100,000 per coin. In all honesty, there appeared to be no slowing down for Bitcoin, as each week, and arguably each day brought with it a new all-time-high (ATH). By December, 2017, Bitcoin had reached an ATH of $20,000, and then boom, everything came tumbling down.
Critics have likened this new tech to the dotcom bubble, and if you were around then or even read about it, you will agree that both revolutions share certain similarities. Inexperienced traders and newbies have against ‘common sense’ staked all they had, with the hopes of doubling or even tripling their investment in few months. Unfortunately for them, the market came crashing in December, with the entire cryptocurrency market cap losing over 50%; from over $800 billion to around $400 billion.
And just when we all thought it was over and that the dip was caused by people cashing out for Christmas, the market fell even further to around $260 billion by February. Enthusiasts were quick to link this to the Chinese Holiday. But here we are, the Holidays are over and nothing is really happening. Or rather, nothing seems to be happening at the surface. So, let’s face the pertinent question everybody is asking – “when’s the best time to buy Bitcoin or dive into the market?” I’d say NOW!!!
And here’s why…
However, before delving to understand why I said now, let’s try to understand what has been going on in the market and why we’ve had sideways, instead of upward movements. In December, there was so much news about this new tech and everybody was trying to get in before it becomes too late – (Fear of Missing Out -FOMO), heard of that right? With so much promise of massive growth, potential huge ROIs, and prominent people like John McAfee, and Bill Gates, amongst others, giving positive hints, it is only natural for noobs to dive in. And let’s face the facts, the laws of economics still apply here, irrespective of the novelty of this new tech. When the demand of a commodity increases faster than its supply, the price is expected to go up. And this was what happened – too many people trying to get in all at once. Unfortunately, instead of Bitcoin soaring above $20,000 it dived towards $6,000, causing a massive sell off.
So why do I think now is the best time to buy Bitcoin?
- The tech is right: Bitcoin is a decentralized system of money which allows seamless cross-border payments, and disrupts the tyranny of the banking system. Yes, there was a dotcom bubble and irrational investors lost money, many internet companies folded because they were simply overvalued, we currently ride on the wings of the internet. Google, Facebook, and ecommerce, are all products of the internet. Similarly, I expect Bitcoin to disrupt conventional financial systems. It is already doing so, and that is why several affected governments and institutions are trying to paint it in bad light.
- Government Recognition & Regulations: From China, to South Korea, America, Japan, South Africa, and many others, several governments are trying to step in and regulate cryptocurrencies. If it was a bubble, they wouldn’t be doing that. Also with regulation comes trust, and when there is trust, the only place left to go is up. Several countries are okaying Bitcoin and cryptocurrency operations. Venezuela for example have launched their own coin. Taiwan has patterned with IOTA to build a smart city in Taipei. The list is simply endless. Furthermore, cryptocurrencies are going to be discussed in the forthcoming G20 Summit.
- Weak Hands Leaving: Weak hands who are out to make quick profits are jumping ship, forcing the prices down. When they see that the waters are secured, they will definitely come back onboard. What better time than take a position when the room is less crowded? Like they say, always buy the dip.
The stage is set for Bitcoin and Cryptocurrencies to rise, it’s only a matter of time.