Is Bitcoin Dead?

The “Death of Bitcoin” has taken over the internet and left investors in a grave dilemma. Check out this insightful article to delve into the details and back your opinion.

 Is Bitcoin Dead?
 Is Bitcoin Dead?

Bitcoin has been one of the most popular crypto assets since it was launched, gathering the interest of millions of investors around the globe. Despite its vast popularity, bitcoin has also been alleged to have died 461 times since its inception, with the most ‘deaths’ occurring in 2017. 

2017 was also a year in which many investors began to purchase crypto assets owing to FOMO (Fear Of Missing Out). Bitcoin has “died” 21 times since the start of 2022, accompanied by a steep price decline. Even though it is a relatively new asset and that cryptographic technology is still in its early stages of development, it is safe to assume that it will be around for the foreseeable future.

Bitcoin As A Digital Currency 

Bitcoin has improved and reached out to become the digital currency with the most significant global recognition. The popularity of this digital currency has spawned a vast array of other digital currencies. These competitors intend to either replace it as a payment mechanism or incorporate it as a utility or security token in other blockchains and financial technologies. Alternatively, they attempt to replace it with their payment system.

The Eventual Decline Of Bitcoin

The price of bitcoin has been slowly declining over the past few months. Since reaching an all-time high of Rs 54,99,457.17 on 10 November 2021, the price has dropped by ~69 per cent to its current Rs 16,61,132.80.

There has been an increase in the search for the phrase “bitcoin is dead.” The rate of internet searches for “bitcoin dead” peaked in June 2022 after the price of one bitcoin dropped below the Rs 14,16,319.09 threshold.

The Graph Of Bitcoin

Bitcoin’s MVRV (MVRV = Market Cap / Realised Cap) score has decreased twice over the past four years. The first was in 2018, and the second was in March 2020. If this trend continues, the bitcoin price may undergo a momentary fall, but it should soon resume its upward path.

Analysts have found several past support levels at which bitcoin may be able to stabilise, even if prices continue to decline. In December 2020, bitcoin achieved a support level of Rs 17,35,575, after which the crypto asset rose to Rs 32,49,250. Suppose bitcoin were to dip below Rs ~15,00,000 again, as it has in recent weeks. In that case, bitcoin’s historical performance indicates that Rs 14,16,353.07 would be further support levels for a new surge for this quarter. 

There are numerous grounds to believe that bitcoin’s use around the globe is not yet done. In addition, if these on-chain metrics consider bitcoin’s future performance, an upward trend should be anticipated.

Why Is Bitcoin’s Value Consistently Declining?

There have been other instances in which bitcoin’s value has climbed, giving investors hope that they may be able to recoup their losses. In reality, bitcoin’s price jumped after Vice President Joe Biden’s administration issued executive orders mandating the development of a framework to handle digital assets. 

Recent reports indicate that the government is also considering the tremendous opportunities that significant crypto assets like bitcoin bring. This step was applauded by those who believe they may benefit from the enhanced regulatory conditions.

In addition, the system that was implemented to limit inflation had a negative impact on the price of BTC. When a policy shift occurs, high-risk assets often see a considerable decline in value. However, these impacts always seem to be temporary.

Similar factors contributed to the depreciation of the value of bitcoin, causing investors to experience panic. Analysts have forecasted that BTC investors should also be prepared for the prices of all digital assets, including bitcoin, to vary similarly to traditional investments, excluding future governmental actions and market sentiment. 

This consists of the cost of conventional assets. It is feasible for lesser-known crypto assets to move with or without the correlation of traditional assets. However, significant crypto assets such as bitcoin and ether will quickly co-relate with conventional assets.

Is Bitcoin Expected To Rise In The Future?

Consumer interest in crypto assets has increased despite the market drop, with many surveyed intending to purchase or utilise digital assets in the future. Based on responses to a survey, the report was compiled. Ninety-one per cent of respondents planned to buy crypto assets within the next six months, according to a study of 1,000 crypto asset users and potential users. 

In addition, the same number of respondents reported having acquired crypto assets within the prior six months. 30% of respondents indicated they had no intention of selling any of their crypto-asset holdings in the following months. The exact number said they had not sold any digital currencies in the previous six months.

The survey shows people’s enthusiasm for adopting digital currencies as payment has increased. Nearly 49% of respondents said they presently use crypto assets as a payment method for online purchases, and 34% said they had used crypto assets for in-person transactions. 

Seventy-seven per cent of respondents claimed to have held digital holdings for less than a year, demonstrating that most respondents were short-term investors in crypto assets.

Will Bitcoin’s Price Continue To Rise?

Regarding financial investing, there are no certainties. There is always a probability that the price of bitcoin may recover as quickly as it declines.

The prospects of crypto assets are limited by some crypto asset-related concerns, such as:

  • coercive tactics adopted by countries such as China
  • Globally, there have been various calls for stricter regulation.
  • Environmental concerns
  • Problematic security and unauthorised access
  • Their value is established solely by market speculation.

The valuation of digital currencies is affected by the idea that greater regulation threatens the decentralisation of crypto assets.

Bitcoin’s advocates highlight its positive qualities:

  • Specific industries have the potential to be utterly transformed by technological innovation.
  • When “middlemen” such as banks are eliminated, transactions become more straightforward and less expensive.
  • Using non-fiat digital money would eliminate the need to worry about shifting exchange rates, thereby streamlining international trade.
  • Transactions are more confidential.
  • Because it cannot be printed or removed, it is a highly reliable method of storing value.
  • Bitcoin has been marketed as a potential substitute for gold, which means it can operate as a price stabiliser.
  • Due to its extreme volatility, there is a possibility that bitcoin will once again begin gaining momentum in the future (perhaps weeks, months, or even years down the line).

However, the speculative nature of bitcoin makes accurate forecasts about its future difficult.

The Reason Behind The Fluctuating Value Of The Bitcoin 

These reasons led to the recent decline in global stock prices:

  • The war in Ukraine
  • Fears over inflation
  • Interest rates will increase the cost of taking on debt to finance business activities.

Consequently, the market for crypto assets has been affected.

The continued repression of bitcoin activities in China is a factor. In addition, rumours have circulated in Jan 2022 that Russia may prohibit all crypto asset-related activity.

Bottom Line

Bitcoin has been declining due to a variety of reasons. Besides its downfall, there is still a fair possibility of bitcoin improving its value in the future. You can explore Unocoin now to know more about Bitcoin and other crypto-assets.

Please find the list of authentic Unocoin accounts for all your queries below:

Disclaimer:
Crypto products are unregulated as of this date in India. They could be highly volatile. At Unocoin, we understand that there is a need to protect consumer interests as this form of trading and investment has risks that consumers may not be aware of. To ensure that consumers who deal in crypto products are not misled, they are advised to DYOR (Do Your Own Research).

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