bitcoin going down
The following article represents the author’s opinion only and should not be taken as investment advice.Whenever investing in Bitcoin your capital is in risk.Make sure to read this post in order to educate yourself better on Bitcoin investments.First, I don’t want to be overly pessimistic.Bitcoin has become one of the greatest investment assets in the world, but whenever bitcoin prices approach historical highs, every investor should consider the currency closely.Consider the end of 2016, when bitcoin approached $1,000 dollars.The first time bitcoin had broken the $1,000 dollar mark was back in late 2013, and as many experienced bitcoin traders will remember, prices suffered a dramatic collapse after peaking, then rebounded, then suffered a long-term collapse shortly after.Many bitcoin investors lost a lot of money in that collapse.So are bitcoin prices destined for a collapse every time they approach historical highs, or was 2013 a one time occurrence?First, let’s look at the Bitcoin historical price chart: Now, before we go any further, it’s important to note a key difference between the first $1,000 dollar boom, and the second surge in 2016.
As prices started to surge, a lot of people jumped on the bandwagon, hoping to tap into rising prices.Then, savvy and cautious investors started to realize that the price surge wasn’t due to the fundamental value of bitcoin (at the time), but instead over exuberance.As more people started selling, prices began to drop, then more people began to panic, creating a stampede that led to prices eventually collapsing.Those who didn’t get out early enough lost a lot of money.If prices are surging at unnatural rates, as an investor you need to keep a close watch on markets.Exuberance driven surges aren’t the only reason prices can rise unnaturally.One of the most appealing aspects of bitcoin as an investment currency is its emergence as a “safe haven” asset.When stock markets and other more traditional financial markets are rambled, people have a tendency to pour their wealth into safe haven investments, such as gold, and now bitcoin.In late 2016 a lot of people began to pour money into bitcoin because they were worried that stock markets and other assets were due for a drop.
For investors, it’s essential to figure out whether or not these fears are actually founded.Safe haven assets are great investments, but they are prone to suffering from “bubbles.” People get scared, pour their money into gold, or bitcoin, then realize that their fears were unfounded.Then, bitcoin prices could plummet.The most important lesson here is to pay attention to why prices are rising.At the end of 2016, bitcoin prices rose largely because of the election of Donald Trump and also fears over the global economy (e.g.India banning its largest banknotes, Venezuelan inflation, etc.).As a safe haven asset, many investors felt their wealth would be safer in bitcoin.Was this price surge justified?Perhaps, but a lot of economic indicators at the end of 2016 were also pointing to economic growth and positive developments.Thus, people looking into investing in bitcoin had to not only look at bitcoin itself, but also state of the global economy.This makes investing more difficult, but if you do your homework, it will also make investing far safer.
I’ve recently came across a video by Chris Dunn that explains the recent price trends very simply.It also shows that the recent crash of the Bitcoin price back to around $840 was to be expected.I suggest taking a look at this video all the way through, it will be worth your time.As an investor, you should always be critical of whatever you’re investing in.Even if you’re very confident in what you’re investing in, whether that’s stocks or bitcoins, you should take some time to examine your investments from a contrarian point of view.Why might a company under perform and suffer a stock price drop?Why might bitcoin markets be distorted, and prices unnaturally high?Remember, markets will always correct themselves.Bitcoin has been and still is one of the best investment vehicles in the world.Regardless, as an investment asset, it will suffer from prices drops, and will also enjoy price increases.The trick, as an investor, is to buy low and sell high.If bitcoin prices are at or near historical highs, then it might be time to sell.
And if prices do drop substantially after markets peak, that might be the best time to buy.People who investing in bitcoin after its price collapse in 2014 would have made a lot of money when prices recovered and surged towards $1,000 dollars in 2016.About Latest Posts Latest posts by Brian Booker (see all) Why is Bitcoin Going Down?Luno (formerly BitX) Bitcoin Exchange and Wallet Reviewed Bitcoin Price Prediction for 2017This essay is an updated chapter from Luis Buenaventura’s Reinventing Remittances with Bitcoin, available for free in e-book and print form now.If you’re just joining the Bitcoin train, it’s probably hard to imagine what the world of early 2014 was like.The largest Bitcoin exchange at the time, Mt.Gox, had just imploded and about $450 mln in customer funds had gone missing.The market reaction to this catastrophic failure was both immediate and prolonged: Bitcoin price would tumble down a series of cliffs from a $1200 peak to a $180 floor over the next 12 months, shaking all but the hardiest of investors.
Preventing such a precipitous loss of value was one of the primary goals of Bitreserve, the startup launched by Halsey Minor in late 2013.Unlike most of the community, the founder of CNET wanted to emphasize Bitcoin’s use as a mode of transmission rather than a store of value, which immediately put him at philosophical odds with purists and crypto-anarchists.Bitreserve’s product strategy was to mimic the function of a Bitcoin wallet, while actually storing your coins’ value in your preferred fiat currency.Sending Bitcoin to a Bitreserve wallet would instantly peg it against, say, the US Dollar price at the time of transmission.If the USD price for Bitcoin was $1,100 and you deposited 1 BTC, your Bitreserve account balance would read “$1,100” in perpetuity.When you wanted to spend some of those Bitcoins, Bitreserve would look up the USD-BTC price at that moment, and dynamically convert your dollars to Bitcoins as needed.This meant that you avoided losses if the Bitcoin price happened to fall, but the converse was also true.
When the price started to rise — as during the bull markets of late 2016 and these recent weeks — your money would be left behind, languishing in its fiat prison.Bitreserve raised close to $10 mln before going through a major revamp in mid-2015..” It maintained the original vision of Bitreserve but did so with greater reach and a brighter color palette.Importantly, they launched the Uphold Connect API, which allowed startups to build their own third-party financial products on top of their expanding network.Uphold was now essentially a wallet-as-a-service platform, allowing young entrepreneurs to build verticals without making large investments in the underlying infrastructure.Two of those entrepreneurs were Antonio Garcia and Ruben Galindo Steckel, the founders of AirTM.“A year ago, [these] two young guys from Mexico City interned at Uphold’s San Francisco office,” writes Tim Parsa, Uphold’s head of Global Strategy and Markets, on the company blog.“A few months later they presented an idea for an app built on top of Uphold’s open API.” AirTM combines two interesting ideas: Abra’s “human ATM” concept and Uphold’s pegged currency balances.
It currently enables the flow of funds and exchange of currencies in some 62 countries, including Mexico, Argentina, Venezuela, the US and China.Co-Founder Ruben Galindo Steckel explains that their focus is in helping people in “harsh currency regimes” who are in need of basic financial services.AirTM works by first connecting its customers with local “cashiers” in their country who can accept their cash deposits.Once the customer hands over their cash, the cashier will then send an equivalent amount of BTC to that customer’s balance on AirTM/Uphold.Once “in the cloud,” the customer can manage their funds as they see fit.This strategy allows AirTM’s users to maintain their money in any currency they desired, which in the case of Argentina and Venezuela, usually means anything other than their own.Having cashiers that are based in one or more of their supported countries allows AirTM to essentially facilitate self-service remittances.As long as the sending customer has money in the cloud, they can forward it to any beneficiary anywhere in the world.