Bitcoin enthusiasts woke up to a bit of good news. Following yesterday’s uninspiring price hold at $8,100, bitcoin has jumped by approximately $400 and is now trading at the $8,500 mark – a potential sign that the bulls are making a return.
No doubt, it has been a stressful period for the father of cryptocurrencies. Following Google’s recent announcement that it would no longer support crypto and ICO-related ads on its platform, the prices of bitcoin and several altcoins ultimately plummeted to lows not experienced since last February. Now, only halfway through March, it’s refreshing to see digital currency picking itself up and trying hard to move on.
It’s difficult to say, however, if this jump will be long-term, or will only carry bitcoin to a short point. Fundstrat’s Thomas Lee has commented that bitcoin’s price has dropped so dramatically, the profits one usually sees through mining are practically null and void.
Between equipment costs, electricity and overhead costs like maintenance, the expenditures of mining bitcoin are now equal to the currency’s price. As a result, incentives are practically non-existent if bitcoin decides that a northward trek is beyond its capabilities in the coming weeks, and many miners are either “hanging up their helmets” for good, or at least until the market proves as bullish as it did during early January.
One major topic of concern for most bitcoin advocates is the lack of knowledge amongst incoming investors. Figures like Vasant Prabhu, chief financial officer at Visa, share the idea that most Americans, though potentially infiltrating the bitcoin arena, know little to nothing about it. They have simply heard the name tossed about, know that it nearly reached $20,000 last December, and figure they’ll get in on the action. It’s all part of a “get rich quick” type of attitude.
The problem, however, is that bitcoin, thus far, has been unable to emulate the success it experienced in 2017. For many new investors, the coin has repeatedly been a disappointment – sinking faster and faster into the red zone before major positive change can occur. Many then seek to sell their coins, believing they have nothing to offer and that the whole scenario was part of an elaborate scam. These massive sell-offs then work to bring the price down even further.
The situation comes full circle when these investors lose all their interest in bitcoin, and ultimately turn their backs on it permanently.
For “green” traders, bitcoin has become more of a fad than a legit way of building an investment profile and subsequent profit. In not giving their investments the necessary time to grow, bitcoin is not able to garner the attention it needs (and deserves) to mold into something bigger.
Even more troublesome is that bitcoin remains something of a “small phenomenon,” with a new survey from Finder.com suggesting that less than ten percent of Americans trade or hold cryptocurrency. Granted this phenomenon could grow and finally hit mainstream status, bitcoin’s price would likely travel northward faster than ever anticipated, and 2017 could not be classified as a fluke.