In the recent times, Bitcoin has been witnessing a tumbling price. The cryptocurrency in everyone’s minds seems to have beaten the expectations of a few and the resistance of many. On 15th September 2017, the value of Bitcoin took a hit, and fell to $3100 (or about Rs 2,20,000 in India); courtesy of the People’s Bank of China’s pressure on bitcoin exchanges to shut down. A sad fate, given the strength of the Bitcoin community there and its importance in the bitcoin mining world. But none are utterly disheartened. Bolstered by the dynamics of the cryptocurrency market — comparable to the entire tech market of the 1990s, the trend of bitcoin is a steep upward curve over 6 times faster and larger than that of the tech market in all its years of existence — the community sees this period as “just another” challenge.
Digital currencies are now the future. The idea of fiscal freedom, unfettered and unfiltered by a government and in control of ordinary people is exciting techies all around the world. Bitcoin forms the vanguard of this change. With gung-ho investors — big, small and that friend from college included — Bitcoin’s rise has made it become the go-to currency for even larger outfits like hackers, terror groups, and even entire countries (Ukraine, Korea etc.). In some ways, one would say that the socio-political conditions of the 2000s have — cumulatively — resulted in the meteoric rise of Bitcoin; this was meant to happen.
“All and all”, one could say, “Bitcoin is doing great”. And they would be right. But there still remain certain questions of what the larger picture holds. The value of the digital currency cannot merely be measured by monetary value, so what form will it take in society? And, will it ever hit $5000?
This was a question often asked with ambiguity and interest even a few months ago. But in the recent past, it simply became a question with a more or less fixed answer — yes. The currency had blazed past $4683, far ahead of the $3500 forecast many had more for it this year. It seems to have corrected now though, and many are wondering why.
The New Gold
One constant issue with Bitcoin is that it is treated distinctly by different stakeholders. Some hostile and others just… well, differently. Governments wary of bitcoin outlaw it, indulge in regulatory measures or adopt it. Most domestic and international merchants adore it. And the citizens of the world love it. But some treat it as a stock, some as a commodity and most others as a currency. Certain reports show that the entire value of Bitcoin in circulation is inching closer to that of all gold held in ETFs. But it doesn’t end there.
The overall viability of Bitcoin still remains a question for most — one side believes it won’t exist beyond the hobbyist fringe it comes from, with the others leaving. The other sees it as a risky investment given the fact that it has no fundamental value at all. So unless these attitudes change, Bitcoin may turn into another trend that has intrinsically no value.
But these socio-economic factors have a few years to set in, and the present Bitcoin’s prospects look good.
There are plenty of reasons to believe it will continue to rise in value though. Japan became the first country to legalise it as currency — and gave it the much-needed impetus for worldwide adoption (and a corresponding increase in prices). With more countries (India, included) looking to legalise bitcoins, a further appreciation in its value is inevitable.
Other forecasts with regards to Bitcoin comes from its deepest doubters, that the currency would even hit $6000 by mid-2018. With patterns the way they are, stock strategists see a trend of user accounts increased by 50% and usage per account to increase by 30%, due to the growing ease in understanding how it works, its lack of volatility (making it a reliable store of value), its rise as a commodity (increasing marketability) and more Non-Price-Related factors.
The future looks good for Bitcoin. It really does.