Bitcoin Prices: To Invest Or Sell?
For a short period in late 2017 to early 2018, Bitcoin was literally the hottest commodity out there. The future had never seemed rosier for Bitcoin. Bitcoin prices were up more than 100% in just 3 months and everything seemed to be smooth sailing.
Then came what seemed like the abyss.
BTC closed 2018 having lost almost 80% of its value. The bear market took a toll and disappointed enthusiasts and investors alike. The price bottomed out at around $3,000 in December but there has been a recent stabilization at around $4,000 to start 2019.
Therefore, the question of Bitcoin’s future is a conundrum for many an investor. Will Bitcoin rise gradually or even explosively with time? Will it continue to decline as was the past year? These questions are pertinent and if there were a way to seamlessly predict then life would be much easier for everyone.
Instead, let’s rely on past indicators to try and gauge what the short-term future could look like. Bitcoin’s prices are not entirely the result of speculation as many would assume. There are certain extrinsic and intrinsic factors that cause ripple effects.
These events in 2018 included the regulatory responses by institutions like the SEC that had a negative impact on Bitcoin prices. Moreover, certain extrinsic factors like hacks and structural factors like the Bitcoin cash hard fork really devastated prices as the year went by.
The SEC’s rejection of Bitcoin Exchange tradeable funds (ETFs) in 2018 impacted prices negatively. However, the SEC decided to review its decision and will give clarification to this effect in February 2019. This will be a significant early determiner of prices and how the rest of 2019 may look.
If the SEC approves Bitcoin ETFs, this could provide much-needed wind in the sails for the pioneer cryptocurrency. On the contrary, rejection can mean further stagnation.
Bitcoin will also feel the ripple effects of stock markets. The turmoil of 2018 has been eerily similar to corresponding indices like the Dow Jones. A stable year of growth for stocks will have a reverberating effect.
Nonetheless, the impact of external factors like hacks, market dumps will most likely not rear their ugly head over bitcoin prices in the short term. This is because the Bitcoin community is certain or hopefully certain to adapt to such events better in the future. This also applies to forks that cause splits and fuel FUDs.
Bitcoin’s prices are difficult to pin down even with advanced algorithms. However, the events of the past can give a general guide as to the subsequent trends. This year, the prices can go up but not as drastically as in past times. Therefore, it is only appropriate to invest modestly on a short term bet based on certain events. Nonetheless, for an experienced investor, there has never been a better time to trust your instincts.