Jamie McNeill
Bitcoin bulls have become emboldened in the last few days. The Bitcoin price has recovered somewhat, and optimism appears to be returning to the markets.
Bitcoin price could rally past $22k
Bitcoin’s uptrend, which signals a shift from the low of $17k, appears bullish henceforth.
Bulls have returned to the market, and they are just as ambitious as they were before.
Last year, before the market peaked out, many were bullish that the price of Bitcoin would eclipse $100k before too long, and the Bitcoin price came very close – the all-time high of $69k was only 31% away from this goal.
However, it may take a much longer time than people realised before Bitcoin is able to achieve such lofty heights once more.
For now, short term bullish speculators are hoping that Bitcoin can stay afloat above $20k, and not retrace a further 50%, which is entirely possible, and wouldn’t be unusual given the declines of previous cycles.
Is the bear market over?
The price rally has left many wondering whether or not the bear market might be over, and whether or not a new bull cycle is on the horizon.
For now, the prospect of a bull market is one that looks bleak: there is little in the world of macro that appears to promise days of exuberance any time soon.
In fact, it seems most likely that if such days were to come, it would be thanks to a devaluation of fiat via excessive quantitative easing rather than asset prices rising based on their merit and potential future returns in an otherwise healthy market.
Bitcoin is the least risky asset in the world
When one compares the world of crypto and Bitcoin with real estate, stocks, or any other asset class, it can seem far more volatile and riskier.
For those who are inexperienced, the volatility can be particularly unnerving. It is certainly very important, when one is entering the Bitcoin markets, to consider that investing rather than trading has historically offered outsized returns, and that volatility is the price for vitality and growth.
In terms of which asset is the easiest to custody and manage, there is no asset that facilitates a simpler user experience than Bitcoin, and nothing that is easier to keep in one’s possession for the long term.
This means that when markets are uncertain, Bitcoin will not always trade as a risk-on asset. Many people, although perhaps not the majority (yet), already treat Bitcoin as a risk-off asset, given that the fundamentals are more stable than any other asset in history.: real estate, gold, stocks, bonds, etc. are all unpredictable in the future and are very easily seized.
What about Mt. Gox?
Of course, many are worried about the Mt. Gox situation, and have feared that the 140k Bitcoin that they are yet to distribute will be dumped on the market, dragging the price down further.
This is, of course, a possibility: Bitcoin from Mt. Gox will be distributed over the coming months and those who have been forced to hodl the world’s best performing asset for so many years may be tempted to take some profits.
However, investors should be aware that that the Mt. Gox distributions shall be taking place in such a way as to not negatively impact the price too much.
The distributions will be made not all at once, but in a series of tranches over the coming months, which ought to spread out and minimise the potential for the price to simply collapse.
Assuming that the Bitcoin price doesn’t continue its bearish trajectory, thinks could be quite hopeful in the medium term.
However, in the short term the Bitcoin price continues to look bleak, with very few catalysts for further price rise other than further devaluation of fiat currencies.
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This article was written for Business 2 Community by Jamie McNeill.
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