After an exuberant 2017, the Great Crypto Correction has dominated 2018. The market cap dropped by over $100 billion, and it is still not clear if the the market has bottomed out.
Yes, this crash, depression, recession, correction, dip, or whatever you want to call it is great news for Bitcoin and its investors for two specific reasons.
Technological Fixes
With everybody and their grandma jumping into Bitcoin, the network clogged up. Transaction fees and speeds were atrocious. A peer-to-peer cash system that charges $30 dollars or more a transaction and takes over a day to confirm is worthless. Maybe for large purchases like a car or house this situation is acceptable, but if Bitcoin is going to survive and become a daily part of life, it needs to be "cash" that works. Otherwise, people are just going to use national currencies or PayPal. In this case, Bitcoin would indeed only be a store of value or "digital gold", but that is not what it was supposed to be.
So, why was Bitcoin's poor performance good news for Bitcoin? First of all, it shows that Bitcoin in its current state cannot scale; that technological fixes are essential in order for it to grow. Now that the Great Crypto Correction is in full swing, it gives the developers more time to implement much needed improvements like the Lightning Network, a second layer solution to Bitcoin's scaling problem. The Lightning Network is already on the Bitcoin mainnet and users are starting to make transactions. At the time of this writing, there are more than 400 nodes on the network, and it is growing by the day.
It might be a long time before Bitcoin goes back up to $20,000 a coin, and that is alright because by the time it does, the Lightning Network will be used on a wider scale and transaction fees and speeds might be able to compete with more traditional payment options like Visa.
Accumulate Coins
If the price of Bitcoin is able to "go to the moon" as some predict, this gives investors more time to accumulate more coins. In other words, the popular cryptocurrency is on sale. Just a month ago, a $10,000 investment would only purchase half a Bitcoin, now an investor can secure more than a Bitcoin for the same price. This is extremely beneficial for the long term investors. In fact, it would be better if the price would just slowly and steadily go up over the next ten years. Of course, there will be bears and bulls, but the December parabolic plunge to the north was simply unsustainable. Steady growth over a sustained period will be profitable for all those involved.
Long term investors who believe in the value of a peer-to-peer cash system that does not need a middle man and gives people – not banks or governments – monetary sovereignty, then now is the time to buy.
I think what is needed is more long term investors to come in and kick off the bullish trend. @jedstephen
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