If you look at prices alone, January 2018 was not a good month for Cryptocurrency investers. The price of Bitcoin halved in a number of weeks and other coins followed the same downwards trajectory.
Historically, January has always been a month when the market dips due to Christmas, tax returns, Chinese new year approaching, and many other things. However, it seems that a lot of negative stories about cryptocurrency were taken at face value and many people panicked and sold up.
It was a reminder of how much the media can positively or negatively affect the value of stocks. The fact that all the top Bitcoin holders were buying during this downturn speaks volumes.
The Bears are Hiding
Over the last week or two we have seen the bears going into hibernation. We may be entering a bull run where the prices of coins go up significantly.
Over the last few days we have seen Bitcoin go over $9,000 and LiteCoin jumped 30% in just a matter of hours. The press are still pumping out articles about Cryptocurrency, however these stories have been more positive than they were in January. This is perhaps why the market is rising so well.
Time will tell whether we are entering a bull run or not. We will undoubtedly see prices go up and down over the next few months, but on the whole I believe we will see the valuation of most coins go up.
Belief in Blockchain Technology
One of the reasons I am not too concerned about the highs and lows of cryptocurrency prices is because I believe in the underlying technology. Blockchain is going to revolutionise every industry across the world. The technology will evolve and refine itself within the next few years and become adopted by the masses.
One of the reasons that the crypcurrency market has had such wild swings is because the general population still does not see the full potential of what blockchain technology can do. People are investing in crytpocurrency without an understanding of what the coins they are investing in actually do. Therefore, when they see negative stories in the press, they are more inclined to sell (or buy, depending on the bias).
These swings will be less erratic over the years, but we aren’t there year.
Thanks for reading.
Kevin