Over the course of a single month, the price of Bitcoin has undergone more ups and downs than a crate of Duncans at a yo-yo championship competition. December 2017 saw the value of the world’s most famous cryptocurrency seesaw wildly – starting at around $11,000 a coin, smashing all records by achieving $15,000 and beyond, and then plummeting back down to around $13,000 by the end of the month.
The meteoric rise of Bitcoin and its sudden fall have left many wondering if the writing on the wall. “Has the Bitcoin Bubble finally burst?” they wonder. “Should we, as cryptocurrency investors, withdraw any profits we’ve made now and just run for the hills?” The answer is more complicated than you might think.
The Big Boom
There’s no denying that Bitcoin underwent one of the biggest price corrections ever experienced by any digital asset in December of 2017. Having finally crested $15,000 comfortably and consistently for weeks, the cryptocurrency rallied to a high of nearly $20,000 – only to crash hard on December 22, eradicating nearly $7,000 in value in just a few short hours. The event was harrowing, causing skittish investors to panic and crypto detractors to crow, but was this big boom the death knell for the big daddy of all cryptocurrencies?
Signs point to “probably not.” This isn’t the first crash that Bitcoin has weathered – its initial milestone of reaching $1000 in 2013 was followed closely by a strong correction that saw the price dropping like a stone to just $300. This put the brakes on the cryptocurrency’s value, with the digital asset taking around two additional years to reach its former high. Meanwhile, other, less volatile corrections have happened all the time to Bitcoin, and this historical data reinforces the idea that the cryptocurrency isn’t done with its skyward rise just yet.
99 Problems but a Bubble Ain’t One
Is the December 2017 correction going to be the nail in the coffin that buries Bitcoin? Highly unlikely based on, as mentioned above, historical price data showing that the cryptocurrency is incredibly elastic and resilient. Of course, this isn’t to say that Bitcoin isn’t experiencing some growing pains; yet in a way, this sudden bubble burst may be in the cryptocurrency’s best interests.
As the use of Bitcoin becomes more widespread, limitations with the software the cryptocurrency was built on – its blockchain – will result in diminished performance. This has already begun to happen, as in 2017 there were two instances of transaction bottlenecks creating days of delays in completing coin transfers. Finding technological solutions to combat the increase in these bottlenecks has largely been successful, but implementing these solutions across the entirety of Bitcoin’s blockchain has been problematic.
Yet the drop in demand for Bitcoin after the December 2017 correction may be just what the doctor ordered in regards to resolving this bottleneck issue. With the pressure off Bitcoin’s development teams, a more acceptable solution – one that hasn’t gotten the Bitcoin community up in arms – can be put into place. This new solution would then pave the way for Bitcoin’s continued success as a cryptocurrency; not so coincidentally, it would facilitate investment in Bitcoin – and its increase in value.
Opportunities for Investment
Between technical problems like transaction bottleneck delays and massive price corrections, many crypto detractors have declared the sky is falling. Yet many crypto enthusiasts have found that the current landscape that Bitcoin inhabits isn’t flaming wreckage but instead perfect for new investment. With the cryptocurrency’s overall historic price increases being undeterred even after massive corrections, the chance to invest in Bitcoin while its value is under the $15,000 mark is unlikely to last very long. If history has taught us anything, a digital currency that was once used to purchase two pizzas for 10,000 BTC is going to continue to grow overall.
However, the number of investors that are likely to capitalize on this unique moment is likely to be small. In fact, Bitcoin may continue to retreat in value even further – ultimately dropping to around $10,000 or even less – as panicked investors pull their assets from what they feel is a crashing cryptocurrency. Meanwhile, smart investors will be waiting in the wings for this moment, poised to reinvest heavily at bargain-basement prices, and the groundswell of new investment activity will soon reach the tipping point to start Bitcoin’s next price rally.
Prepare Now for the Future
Millions will see the December 2017 Bitcoin bubble burst and think that it’s too late to join the crypto revolution. “Cryptocurrency’s high-price days are over,” they might say, dismissing the possibilities of the future. Again, this is good news, as there will be more opportunities for existing investors who have chosen to ride out the storm as well as those who are preparing to dive into the murky waters of cryptocurrency for the first time.
There are some circumstances that are likely to act against anyone interested in joining the crypto revolution in the post-Bitcoin 15,000 bubble days, however. Chief among these is the high learning curve associated with all things cryptocurrency. Yet in response to the sometimes Byzantine nature of unraveling the secrets of how Bitcoin and other cryptocurrencies work there is an ever-increasing number of people and places willing to show new investors the ropes.
Whether it’s learning how to use wallets to store Bitcoin, understanding the mechanics of how a blockchain operates, or simply discovering the processes involved in buying and selling cryptocurrency, opportunities abound. It’s never been easier to educate yourself about how crypto operates and how, in just a few short minutes, you can go from curious bystander to successful investor.
15,000 and Beyond
The question of the recovery of Bitcoin’s value isn’t a matter of if but of when. The meteoric rise of 2017 may not be repeated any time soon, but this may be in the currency’s best interest to avoid another major correction as the one we just experienced.
Where will the currency go from here? It depends on who you ask – some predict Bitcoin will reach as high as $40,000 by 2020. While this may be incredibly optimistic after the highly volatile last month of 2017, it’s almost guaranteed that Bitcoin’s value will continue to rise.
Author: Catherine Tims is a freelance writer for Bitcoin Cryptocurrency . After receiving her Master’s degree in English Language and Linguistics at the University of Arizona, she taught writing to graduate students at the University of Illinois/Champaign-Urbana. She has her own writing business, Ivy League Content, and freelances full time for business clients who need highly-researched articles.