The cryptocurrency market continues to bleed and it seems that everything is gone. But we are sure of a market reversal and now we will tell why the native will definitely happen.
Market cycles
Let's start with the theory. All markets that trade in securities or precious metals periodically experience ups and downs, and Bitcoin is no exception. In almost ten years of its life, bitcoin has collapsed several times, when its value fell by 70% and even 90%. Today we are in the next bubble in its most dangerous phase, when the nerves pass and a panic sale begins.
But each time after the most persistent in the game, the market again moved on to the growth phase and Bitcoin set new records. The last time he went up to 20 thousand $, which means the next maximum should be even higher. And those who can resist the general panic and enter the market at the bottom with an eye on the next native will benefit.
Institutional investors
In order for the market to go up, it needs a significant reason, and if earlier it was the development of technology and an increase in the scope of adoption, then last year the market was triggered by the launch of bitcoin futures on the CME and CBOE exchanges. This is the connecting bridge between the cryptocurrency and the global financial market, whose capital is estimated at trillions of dollars and very soon institutional investors will go over this bridge.
The U.S. Securities and Exchange Commission has been postponing the adoption of the Bitcoin ETF all year, but even they admit that they cannot forever resist these processes. Because it’s not the developers or cryptocurrency enthusiasts who are fighting for the release of bitcoin on the stock exchanges, but the leading financial companies. And while the states are thinking, trades on a similar cryptocurrency product have already been launched on the Swiss Stock Exchange.
Another growth catalyst will be Bakkt's cryptocurrency trading platform, which is launched by ICE, which owns the New York Stock Exchange. As well as a platform for institutional investors from one of the largest financial companies in the world, Fidelity Investments, under whose management, according to 2017 data, there were over 2 trillions of dollars.
With high probability, it is large capital that is behind the current collapse of bitcoin. ICE, Fidelity Investments and the leading banks of the world are striving to buy as much cryptocurrency as possible at a low price, in order to then get the maximum profit by selling it to their customers.
Mining works
In 2018, the horror story that Mining unprofitable, it's time to turn off the breaker and hand over the equipment for scrap. There is a certain amount of truth in this, because large capital companies have entered this market and the technology for the production of bitcoin miners has stepped far forward. Therefore, those who cannot invest hundreds of thousands and even millions of dollars in the purchase of new ASIC miners are forced to leave the market. But this does not mean that mining has died completely, just that the competition in it has become an order of magnitude tougher.
If you look at the bitcoin network hash chart, then this year it has more than doubled from 15 to 38 Exahesh / second. At the same time, peak values exceeded 60 Exahesh / second, but after the bitcoin price was sold below 6000 $, many miners had to take a break to not work at a loss. But in a number of countries, the cost of mining bitcoin is 2000 $ or less, and it is there that we should expect the opening of new mining farms.
Bitcoin is evolving
Mining is far from the only indicator of bitcoin and despite the difficult year for investors, the scope of the first cryptocurrency and its technology are constantly improving. If you look at the statistics, the number of new bitcoin wallets continues to grow, the share of SegWit transactions increases and the cost of transfers decreases along with it. The total number of transactions in the bitcoin network is also gradually growing.
We especially note the development of the payment network Lightning Network. Skeptics did not believe in this technology and its development is still not completed. But already today, the Lightning Network has over 4400 nodes and 13 payment channels, through which more than 000 BTC are transferred.
Cryptocurrencies are a separate industry
The history of bitcoin began with a white paper by an unknown author, in which only a few enthusiasts of the cipherpunk movement believed. But then a huge community formed around them, which became the basis for creating an entire industry. And today, cryptocurrencies can no longer be ignored, this is evidenced by both the head of the International Monetary Fund Christine Lagarde and the leaders of the G20 countries. The world has recognized that cryptocurrencies will not disappear anywhere and is now looking for points of interaction with them.
How will it look like? With a high probability we will see a repeat of the history of the dotcom bubble, when in a few days the majority of Internet companies went bankrupt. And now the cryptocurrency market is very similar to that boom of Internet companies, because only on CoinMarketCap there are over 2000 of various projects. And then the bubble burst and only the strongest, such as Google and Amazon, remained afloat.
And a similar leader in the cryptocurrency market is Bitcoin, which accounts for more than 55% of all capital, behind which is the strongest community and which is the most widespread cryptocurrency in the world.