It has been a tumultuous time in crypto these last few months to say the least. Bitcoin reached an all-time high of $64,000, only to drop by more than half all the way down to $28,000. There were several reasons for this; FUD and market manipulation by Elon Musk, Energy FUD, China banning bitcoin FUD, and then China banning bitcoin mining, IMF attacking bitcoin, regulation rumors from the Government and the list goes on and one. At the time of writing this article, bitcoin's price is $34,300. We have been stuck in this range for nearly a month now. Is it time to admit that this bull run may have come to an end? Is it just getting started? Here are my thoughts on the current situation that bitcoin has found its way in, and outlook for the future.
If you know anything about me, it is most likely that you will know that I'm about as bullish as a person possibly can be about bitcoin and where it's heading towards. But, that isn't to say that this has hasn't been a draining bull-run, requiring quite a large amount of mental stamina and patience. I think most people who are involved in this market in a very close way on a daily basis would agree with that fact. But with that said; no matter how difficult it was sometimes to remain positive, and continue keeping my foot on the gas pedal in my never-ending bitcoin accumulation. I was able to remain positive, in-fact, I became even more bullish during this price down movement.
Let me tell you why.
If you have true conviction in bitcoin, you probably have some lofty price predictions for where the price of bitcoin may go towards in the future. I do as well. But, bitcoin going up to those insane prices isn't what makes bitcoin strong, and it isn't the thing that you should be focusing on; because it is not the most important thing. That may surprise people, especially for those who are only in these markets for the money. The most important thing is how bitcoin handles these periods of extreme FUD, attacks from the government and people with real power. If bitcoin is to become the world reserve currency, these attack we have seen recently will only be the tip of the iceberg that is coming. After going through all the things that I mentioned above, bitcoin is still standing at miraculously is still at a price of $34,300. If these collection of things happened during any other previous cycle the bull run would have been already confirmed over. In fact, it might have even been a death blow to the coin that we all love. But bitcoin is still standing, still far above its previous cycle all-time high and this makes me incredibly bullish.
In fact, I would argue that things are lining up in a way that will shock the markets and the price will skyrocket.
Let's first discuss the China mining situation. Miners in China were required to turn off their machines and most have sent their mining machines to other parts of the world to set up mining operations. This had caused the hash rate of BTC to drop by 50%, and with that so too did the price of BTC go down with it. New outlets were claiming this was very bearish and bitcoin might not be able to recover from this for years.
While that is still to be determined, there is one thing you need to remember. One of the largest FUD stories that we have kept hearing throughout bitcoin's life was how much of the mining percentage actually came from China. That perhaps China would be able to control it or have an attack on the coin in the future. But like I just mentioned; these Chinese miners have been dispersing these machines to other countries around the world, making bitcoin much more decentralized and more attractive for other countries or investors to get into the game.
Then we had El Salvador making bitcoin legal tender in the country. This was the biggest story we have ever seen in the history of bitcoin. In all honesty this news should have instantly sent the price of BTC up to at least 50K if not more. But the world has a bias against smaller, and poorer countries that aren't the big players in the world. It will be interesting to see how this ends up going, but there are two big takeaways from this situation. The first is that there will be more countries to come. After El Salvador officially made bitcoin their legal tender, there was almost instantly huge support from leaders of other countries from Central and South America. It is looking that Paraguay is the next potential country that make try to do the same thing as El Salvador. The other thing to take away from this that most people are ignoring is that El Salvador will be using Lightning. One of the largest complaints about bitcoin was that it is too slow and expensive to use for every day transactions. Lightning changes all of this. But, even the most bullish of bitcoin fans probably didn't think Lightning was ready to handle this much adoption. (a country adopting it). If it is able to handle this kind of work load, that means about 50% or more of the coins on the market who are claiming to be "like bitcoin, but cheaper" will lose any claim for usability or importance. I'm looking at you Bitcoin Cash and Litecoin. While I'm incredibly excited that El Salvador made Bitcoin legal tender, I'm more interested to see how Lightning will handle this. The stakes are larger than you can imagine.
Finally I would like to talk about the whole Elon Musk, Tesla and Energy FUD that we've been having to deal with. If you aren't aware, Tesla stopped accepting bitcoin as payments for Tesla cars, because Musk said they were considered about the energy usage and how it wasn't green energy. This is the moment that bitcoin dropped from the $60,000 area and kept dropping and dropping. This also led to hesitancy from other companies about putting their balance sheets into bitcoin as well. After all; if Elon Musk and Tesla; arguably the most respected or famous CEO and Tesla being at cutting edge of tech and energy, what could they say to go against it? Elon did say that Tesla would reverse their decision once bitcoin reaching a mark of 50% of all mining coming from green and renewable energy. This led to the creation of the Bitcoin Mining Council helmed by Michael Saylor and included most of the biggest players in mining. While many bitcoin maximalists were against council, I think many good things will come from it. Having concrete information on the energy usage and how green it is will be necessary for some of the bigger companies to begin investing in it. I'm looking at Apple, Google, Amazon, Microsoft, Walmart and the list goes on. Like it or not, Musk bringing this energy FUD to the attention of many did bring the price down, but, we will be better for it. We have already crossed the 50% mark of mining being produced by green energy and we should soon see Tesla reverse their previous decision. That alone should help the price of bitcoin recover. We have also seen new brainstorming ideas of how to make bitcoin mining even more green. Such as El Salvador planing to use their volcanos and geothermal energy for their mining.
While this FUD has been stressful and exhausting. Unlike in the past, where the same FUD keeps coming around and around, being endless. This time bitcoin is "defeating" these FUD items and checking them off the list. No longer will we hear the FUD about bitcoin mining being too concentrated in China. And very soon I'm confident we will see the same with it's energy usage.
As for this bull run. If you haven't guessed it already, I'm of the belief that this bull run is not finished yet. In fact, I think it will be unlike any previous cycle have seen up until now. I see the price of bitcoin definitely going over $100,000, and probably even over $200,000. Which means that while the price of bitcoin is at $34,300; it is an amazing chance to accumulate.
How about you? Do you think this bull run is finished? What is your price prediction for bitcoin!?
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As always, thank you for reading!