The prices of Bitcoins surged dramatically last year, but the virtual currencies have experienced a downward spiral this year. In December 2017, it was valued around $14,800 but it has lost more than half of its value and is trading at around $6,364.
Some predict that the meteoric rise of Bitcoin was nothing but a bubble, while as some crypto advocates suggest that Bitcoins would rise from the ashes again to bring about a revolution in the digital space.
Let’s have a look at scenarios that can help cryptocurrencies bounce back stronger:
Nassim Taleb, author of Black Swan quoted,
“Bitcoin is the beginning of something great: a currency without a government, something necessary and imperative.”
A digital currency that works on a peer-to-peer basis, Bitcoins can be sent from one person to another person just like currency notes.
The Bitcoins are decentralized and no central authority controls them. The system depends entirely on cryptography to control the creation of the currency.
3 reasons why cryptocurrencies might bounce back:
The political risk around national currencies can affect the price of Bitcoin remarkably as people use it to hedge against price movements in a particular currency, when they want to quickly move large amounts of value out a country or currency.
The economic crisis in Greece in 2015 triggered an increase in the buying of Bitcoin by Greek citizens who were wishing to protect their wealth.
The nervousness about the national referendum for Britain to leave the European Union (Brexit) on June 23, 2016, also led to an increase in the price of the virtual currencies.
And, we all know that instability is the only constant when it comes to politics, Venezuela is also dealing with such political crisis. Thus, one can expect the price of these digital currencies to increase.
Facebook reverses its decision to ban adverts for Bitcoins
Facebook is a tech giant that commands loyalty in the marketplace. Facebook’s decision to overturn its decision is a good news for the crypto market.
Facebook banned crypto ads in January 2018, citing the need to protect users from possible fraud. But, last month, Facebook launched a blockchain exploratory group within the company with one of Coinbase’s board member a part of his team.
The Silver lining
A leading venture capital firm Andreessen Horowitz has said that its venture fund would be used to back companies in the space and benefit from the nascent market of cryptocurrencies.
The company also revealed it has no intention of selling any of its current virtual currency assets for at least the next five years. It has dedicated $300 million funds dedicated to the crypto market and this has given the crypto investors a new hope.
Moreover, the cryptocurrencies current values still represent a 260 per cent increase year-on-year. This could be considered as another silver lining in the dark cloud.
The crypto market has witnessed several ups and downs in the years gone by, the volatile nature of the trade is not for the feeble-hearted. However, it remains to be seen if the cryptocurrencies manage to take a leap in the coming months or not?