Is this the end of bitcoin and a crash of a short-lived dream of the crypto era? Is this the end of the world? Is Bitcoin dead? No, stop with this dramatic FUD. Not even close. But that being said it’s extremely hard to not notice the recent fall of Bitcoin in value and here I present you 5 reasons why it is currently falling.
1. Recent adoption of Bitcoin from people who have no business in it
I’m absolutely confident that over the Christmas table you must’ve had heard somebody’s aunt, cousin or grandmother claim they started “investing” in Bitcoin in hopes to double their “investment”. Placing your money into something that you have absolutely no awareness of, is as good as going to Casino and play the roulette – you might get lucky but don’t count on it. Now imagine this scenario: Grandma Manny puts her savings of 5000$ into Bitcoin through Coinbase and within the next 3 days she sees it’s now worth only 3000$. She feels as if she lost 40% of her savings overnight. The result? This the result we are seeing now: people trying to cope and panic sell. Rookie mistake. We know better.
2. Fees and transaction times
You know when you pay a 20$ fee for a 100$ transfer then you are going to lose a lot of users. This is a no-brainer. It becomes a lot worse when the network is super overloaded and the 100$ transaction takes over 6 hours to arrive. Within 6 hours there are quite a few alternative cryptocurrencies that could’ve mooned within!
3. “The Real Bitcoin” fiasco
Bitcoin Cash, Bitcoin Gold, Bitcoin Diamond, Bitcoin Private and quite likely something else that I have forgotten are all forks of Bitcoin who claim to be the “next Bitcoin” promising better transaction times and lower fees. There has been an insane amount of hype, especially about Bitcoin Cash and there’s been a power struggle. People even predicted Bitcoin Cash would overtake Bitcoin as soon it get’s listed on Coinbase. It didn’t. Neither will any of the other existing and upcoming forks. All the forks will also be rendered useless as soon Bitcoin Lighting gets launched. Yes, Bitcoin core team is actually working on the fees and transaction issue.
4. Bitcoin losing market dominance
As more and more people venture into the world of altcoins we’ve seen Bitcoin’s dominance in cryptocurrencies drop from over 45% to 37.9% in a short period of time.
5. Holiday season
Last but not least, whales and bigtime investors have families and vacation as well. What would be a better time to cash out profits than the holidays? After all, lot of hard work has been done and time to lay off for a while. Ironically, this sort of behaviour enables them a very easy re-entry as soon they return.
What to do in a situation like this?
Do I have to spell it out for you? Buy, accumulate, re-invest. Buy low, sell high. The trading ABC.
The biggest losers of a situation like this?
Weak hands and panic sellers. And Litecoin holders, of course. Litecoin holders are destined for a very miserable crypto life.