What is happening with Bitcoin? Why does the price is going up? Am I still on time to invest? Is it too expensive now?
Those are questions I hear every day since Bitcoin started to get back on track. It is clear that the real value of Bitcoin was not $20’000 at the end of 2017 and neither so $3300 a few months ago. Those are values created by greed and fear of people investing in Bitcoin.
So let’s have a look what the real value and the potential of Bitcoin is.
Looking at the usage of Bitcoin around the world and listening to some experts of big international institution the value of Bitcoin is around $7500. Does that mean that Bitcoin is too expensive at the moment?
There are different points of view.
One is to just look at the value the big experts are talking about or looking at the political and economical situation in the world. If we just look at the value in usage and adoption $7500 might be just about right. Although this value will be increasing rapidly due to higher adoption of big companies like AT&T in the US.
When we include some information about the world economy we can see a few challenges arising. One is that at some stage we will enter a recession. This is just part of the economical cycles in capitalism. This could mean different actions on Bitcoin. One is that stocks will go down and because of all fear created people will also get out of Bitcoin investments so price will fall. Or while the prices of shares will go downhill, Bitcoin will go up and motivate lots of investors to jump on the Bitcoin bull run. At this moment nobody can be certain which of the two scenarios will happen.
Looking at a third aspect; the isolation of countries like China, Russia, Iran etc… makes it more challenging to move money internationally for them. This might motivate them to change to crypto transactions to stay in the game. With a market cap of only around $280 billion at the moment you can imaging that the value would explode ones a country decides to use Cryptocurrencies.
Then last but not least the role of the banks…. Banks are in general not in favor of Bitcoin but they are starting to create their own cryptocurrencies. This would not mean anything for the price of Bitcoin if we do not include that banks are helping people to get used to cryptocurrencies. Most people are scared or are not even thinking of buying Bitcoin because it is something strange. Something they do not know. Now with the banks helping people to understand and trust in cryptocurrencies this cap is getting smaller and smaller.
Is it time to invest now?
With this all in mind we can see that the price of Bitcoin will go massively higher than it is at the moment. But as we are talking about the potential there is certainty that Bitcoin will keep its volatility with extreme price changes. While knowing that the potential is amazing we are also aware of a possible recession in not too much time. Therefore, every person should be invested in Bitcoin after securing emergency funds in the local currency for the case of a job loss in a possible recession.