After opening 2017 around 1000 dollars per unit, on December 17 the price of Bitcoin reached 20,000 dollars and accumulated a rise of 1900% in just twelve months months. At that time, the fever for the young cryptocurrency spread to the media around the world and its name was repeated in elevators, bars and offices by people with and without financial training.
What happened later? The price stagnated, fell sharply, bounced a bit and, after a week, ended up taking a slope as bearish as the slide of a slide. On February 2 came to touch the 5900 dollars, a figure that spoke of a drop of 70% from the maximum.
The detractors of Bitcoin came out to declare his death and a supposed explosion of the financial bubble that had catapulted him to unexpected values
years ago.
Not to hurry. I have been following the evolution of this new technology since 2013, when it was worth less than 100 dollars. In that time, I have seen many specialists bend the bells for Bitcoin and then silence before his resurrection.
With Bitcoin trading well below its 2017 highs but also well above the February low, it is time to analyze the causes that caused the storm in the crypto market and think about what we can expect from here who bet on the intrinsic value of the Blockchain (the new technology that is behind the Bitcoin) and we do not get carried away by the impressive price variations that in the short term experience the most representative cryptoactive.
Causes of the fall
"Trees do not grow up to the sky" is an old slogan heard in the stock market when the assets that went up a lot face corrections or sharp price drops.
In the case of Bitcoin, beyond a correction expected after the astronomical rise of 2017, the strong depreciation hides compelling reasons. The conservative lovers of the status quo have been offering an important resistance since they understood that the new decentralized technology is against the interests of the financial sector in general and the monopolies of several industries in particular.
In a synchronized way, they attacked the cryptoactive market through a triad using the best weapons they have:
1) Regulation: For some time now, the financial sector has been pressuring the governments of different countries to regulate the Bitcoin with strict laws, although until now there has not been much progress in the matter.
Despite the fears of the authorities to generate a brain drain caught with the Blockchain to other countries, the fact is that the SEC (Security and Exchange Commission or Commission of Markets and Values
of the United States) decided to take a step in the path that The bank lobby demanded and was launched to investigate the ICO (Initial Coin Offerings or Initial Offer of Currencies), to which the Blockchain organizations appeal to get fresh funds directly from interested investors.
This measure caused fear among the crypto-investors, who, faced with potential sanctions, decided to take refuge in those crypto-active that "saw the light" without having made ICOs, such as Bitcoin and Litecoin.
2) Censorship: In a maneuver as striking as suspicious, Google, Facebook and Twitter banned the publicity of any company linked to Bitcoin and cryptoactives regardless of their field or mission.
They appealed to the alleged objective of "protecting their users from potential scams", a principle that does not correspond to other Facebook actions that currently have Mark Zuckerberg in the spotlight and that refer to the irresponsible use of private data by millions of users.
Undoubtedly, these obstacles slow down the growth of the crypto industry and affect the nascent companies in the sector.
3) Taxes: The position of most countries (including Argentina) responds to a reasoning like "we do not know what Bitcoin is or where it goes, but just in case we are going to tax it".
Some considering it similar to real estate (department, for example) and others looking for kinship with fixed or variable income assets (stocks and bonds), most countries began to tax holders.
In the United States, measures of this type forced hundreds of thousands of Bitcoin holders to sell part of their capital in cryptocurrencies to pay taxes on the profits obtained.
It was compulsory sales that led more than one smiling investor to pay up to 7,000 dollars for each Bitcoin in the portfolio.
conclusion
The storm has passed? Difficult to know, but worse are those who predict the death of Bitcoin simply because of the fall in the price of recent months. Those would-be analysts should observe the whole picture. There they would meet with the following progression:
March 2010: 0.005 usd.
March 2011: 1 usd.
March 2012: 5 usd.
March 2013: 80 usd.
March 2014: 600 usd.
March 2015: 250 usd.
March 2016: 400 usd.
March 2017: 950 usd.
March 2018: 8,000 usd.
March 2019: ??
In 2001, when the Nasdaq bubble exploded, many respected economists rushed to declare the end of the Internet and the economic activity that revolved around the network. The results contrast with their auguries.
My advice is to open our minds to the possibility that cryptoactives and Blockchain have come into our lives to stay and transform them radically in the coming decades. It is very likely that the efforts to stop it will not do more than delay it: The new technology, sooner than later, will be part of our day to day life.