Bitcoin rise and fall

Tales from the crypto
The rise and fall of bitcoin

Investors in bitcoin are learning some very old lessons

THE great Sir Isaac Newton may have revolutionised our knowledge of the world but he still had his blind spots. He was sucked into the great mania of his day, the South Sea Bubble (pictured) and lost a lot of money. “I can calculate the motion of heavenly bodies but not the madness of people,” he ruefully reflected. In retrospect, he should have pondered the popular saying that was used to define his law of gravity: “What goes up, must come down.”

Investors in bitcoin are learning this old truth. The price of the cryptocurrency peaked last month at somewhere over $19,000 (there is a very wide spread, a problem in itself) but, at the time of writing (around 11am GMT), some exchanges now show a price below $10,000.

Perhaps the best way of understanding bitcoin is through a model of how bubbles operate. The classic model, developed by Hyman Minsky and elaborated by Charles Kindleberger, a historian who studied bubbles, has five stages: displacement, boom, euphoria, financial distress and revulsion. The displacement is some technological development that can be used to justify a “new era”—railways, canals, the internet or blockchain. A boom then occurs and drags in more and more investors; at some stage, we reach euphoria, where the boom is widely known to the public and there is talk about those who made millions from the trade. This stage had been reached in November, when there were adverts for cryptocurrencies on the train and discussions on popular radio programmes.

In the euphoria stage, people buy because others are buying and because they anticipate being able to sell quickly at a higher price. For a while, this trend is self-reinforcing. At some stage, however, doubts set in; some people decide to take their profits while they can. Bad news occurs; with bitcoin, it seems to be reports that authorities in South Korea (where trading has been particularly active) are going to crack down.

Once the price starts to fall, the psychology changes. People who bought early and were counting their millions suddenly see a dent in their wealth (and it is worth noting that you are not really rich unless you have got into the asset class and out again). Other people may have bought above the current price and are bitterly regretting their mistake. Bargain hunters jump in and temporarily drive the price higher but it doesn’t last.

We have not yet reached the “distress” stage but we might be near it. Worries about the security of cryptocurrencies could be the trigger for another sell-off. At that point, the price could fall as quickly as it rose—as the saying goes “up like a rocket, down like a stick”. Investors may well reflect that bitcoin had not become a means of exchange for day-to-day transactions, has not proved to be a reliable store of value and thanks to the proliferation of cryptocurrencies, does not really benefit from a limited supply. As Steven Englander of Rafiki Capital writes:

There are no barriers to entry on the crypto space, other than a good story about the niche that your coin is filling. The number of ICOs (initial coin offerings) tells you that it is easy and cheap. There are big incentives to get in on the ground floor of a cryptocurrency that has even moderate acceptance.

A digital asset that has no income stream is very hard to value. That makes it hard to designate a price target on the way up, but also hard to set a floor on the way down. But by the time people realise that, we will be in the “revulsion” stage.

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Bitcoin falls further as China cracks down on crypto-currencies

The price of Bitcoin fell below $34,000 (ВЈ24,030) for the first time in three months on Wednesday, after China imposed fresh curbs on crypto-currencies.

Beijing banned banks and payment firms from providing services related to crypto-currency transactions.

It also warned investors against speculative crypto trading on Tuesday.

It follows falls in Bitcoin of more than 10% last week after Tesla said it would no longer accept the currency.

On Wednesday afternoon, Bitcoin recovered some ground, although it was still down -10.4% at $38,131.

Meanwhile, other digital currencies such as Ether, which acts as the fuel for the Ethereum blockchain network, and Dogecoin lost as much as 22% and 24% respectively.

At the same time, Tesla shares fell more than 3% on Wall Street, possibly because of the electric carmaker’s exposure to Bitcoin.

The firm, owned by Elon Musk, still holds around $1.5bn worth of the crypto-currency.

Beijing cracks down

Crypto-currency trading has been illegal in China since 2019 in order to curb money-laundering. But people are still able to trade in currencies such as Bitcoin online, which has concerned Beijing.

On Tuesday, three state-backed organisations, including the National Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China issued a warning on social media.

They said consumers would have no protection if they were to incur any losses from crypto-currency investment transactions.

They added that recent wild swings in crypto-currency prices «seriously violate people’s asset safety» and are disrupting the «normal economic and financial order».

Neil Wilson of Markets.com said: «China has for some time been putting pressure on the crypto space, but this marks an intensification — other countries might follow now as central banks make strides towards their own digital currencies.

«Until now, Western regulators have been pretty relaxed about Bitcoin, but this might change soon.»

Tesla snub

In March, Tesla boss Elon Musk announced unexpectedly that the electric carmaker would allow customers to buy cars using Bitcoin.

But last week, he did a U-turn and suspended vehicle purchases using Bitcoin because of environmental concerns.

His fears centre on Bitcoin mining — the energy-intensive process through which the digital currency is generated, using high-powered computers. It often relies on electricity generated with fossil fuels, particularly coal.

«We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,» Mr Musk wrote.

«Cryptocurrency is a good idea. but this cannot come at great cost to the environment.»

He said the electric carmaker did not intend to sell any of its Bitcoin and intended to reinstate crypto-currency transactions once mining shifted to using more sustainable energy sources.

Although the digital currency cannot be traded in China, more than 75% of Bitcoin mining around the world is done in China.

For anyone who has followed the crypto-currency scene for a while, the events of recent weeks are a familiar story.

Some random event — say, a tweet from Elon Musk announcing Tesla will accept crypto-currency payments — sends Bitcoin to new highs, and people begin to say it’s winning mainstream acceptance.

Then another random event happens, perhaps a change of course from the Tesla tycoon. It comes tumbling down again, and talk of it going mainstream fades into the background.

Last month, in a chatroom on Clubhouse (another phenomenon that seems to be swinging from boom to bust) I expressed some scepticism about crypto-currencies.

Up popped a senior figure from London’s thriving fintech scene: «Rory, Rory,» he chided me, «crypto is becoming an accepted asset class.»

With big City institutions taking an interest, that had a ring of truth — back in April, at least.

But this week, the weather had changed, with the Financial Times reporting «new doubts among institutional fund managers over the future of crypto-currencies as an asset class».

My mind went back to 2013, when I had first taken an interest in Bitcoin. In a report for Radio 4’s PM programme, I had bought a pizza for 0.5 BTC, a tortuous process which had not seemed worth the ВЈ30 it cost back then — of course, at today’s exchange rate, that was a ВЈ14,000 pizza.

I had also written a blog post headlined «The Bitcoin Bubble», in which I tried to mine some lessons from a period when the price of the cryptocurrency shot up from $15 to $276 and then hurtled lower again.

I ended a piece in which I compared the cryptocurrency with 17th-Century Dutch tulips or London houses in the 1980s with this thought: «Unless and until Bitcoin can be used to buy a sandwich, or be accepted by your friends when you pay them back for a restaurant meal, then it is likely to remain just a playground for geeks and gamblers.»

Eight years on, it is still virtually impossible to buy a sandwich with Bitcoin.

And why would you want to, when there’s a good chance you’ll be mocked a few years later — as I’ve been for my transaction — for giving away an asset that goes on to soar in value?

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Will Bitcoin Rise Again in 2020 Or Another Fall is Coming?

Will Bitcoin Rise Again?

Yes, Bitcoin will rise Again in 2020 and a top coin which was first ever cryptocurrency in market started with decent technology and now it is one of the best inventions in investment of world along with faster currency transfer medium, so being top or first-ever coin many investors was started investing in this cryptocurrency which results at one point at end of 2017 along with Bitcoin other cryptocurrencies started rising with huge percentage with average growth percentage of above 400% and this percentage was the best thing about cryptocurrency, so this become overnight sensation, but after following banned in China & other countries disaster starts happening where most of the old coins started dropping with huge percentage, which impacted really bad which cause continuous transaction dropped as well as user also starting losing trust.

Bitcoin Price Prediction 2020

As of today, Bitcoin is trading at $8501 USD price with 6% of one-day growth rate along with this Bitcoin doing really great in 2020 because since 3 January 2020 Bitcoin is going up and it almost rise by $1200 USD which is really great growth as compare to another cryptocurrency, as some of you still find this is low percentage of growth but looking at current condition and market of investment then this growth still countable and talking about potential many of expert of cryptocurrency still giving hint about Bitcoin will be touching $20k USD mark in 2020 and that will be surely happening in upcoming month, as there will many problems such as security of transactions, hackers attack and other Black money related things were repaired or we can say overcome by efforts of maker of Blockchain as well as other technology and they also reduced transaction fees of every transaction along with low amount transaction will be helping to take huge leap in market cap value.

How Bitcoin Go Up 2020?

As total 20+% total supply is still available to buy and because of per coin prices is really huge as compared to another cryptocurrency to finish total supply Bitcoin takes more time, so if this increment in market cap value keep shaking up then it will create huge fluctuation in prices, which automatically help to bring lots of investor to Bitcoin and surely till end of February 2020, Bitcoin will rise above $10k USD mark, as we know there is so many big cryptocurrency was launching including Facebook cryptocurrency under name Libra going to be debut in 2020, which expected to be following Blockchain technology, so to initialize token coins they may go with Bitcoin as exchange which also create more buzz and keep transaction up which is again help to take lead in 2020.

«Join These Biggest ICOs of 2021»

Bitcoin Another Fall Coming or Not?

Its really unpredictable but we can’t say anything about it because cryptocurrency already face huge from mid of 2018 to end of 2019, so there are very less chances of another fall, as following previous year performance in which Bitcoin was trading at average price of $3500 USD mark then after maintaining it till April 2019 it started growing with huge percentage in which from April 2019 to May 2019 it was surge by 31.46% and then again from May to June 2019 it goes up with 58.27% and it continues till August 2019 in which Bitcoin was showing 15% growth rate, so if this repeat this year also then till July 2020 BTC prices will be cross $15k USD with 10% growth in market cap value.

Month & Year	Price Prediction in USD
February 2020	$8500 USD
March 2020	$9100 USD
April 2020	$9320 USD
May 2020	$10,450 USD
June 2020	$12422 USD
July 2020	$15,630 USD
August 2020	$14,872 USD
September 2020	$16,983 USD
October 2020	$14232 USD
November 2020	$18,345 USD
December 2020	$19,800 USD

Note: above prediction is just set by previous year performance of Bitcoin.

So looking at the above prediction December 2020 or Beginning of 2021 will be the time where Bitcoin again crossed $20k mark and that will be a 110% growth rate for those who invest their money in January 2020 or December 2019.

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How Does Bitcoin Price Fall and Rise?

Koinal.io offers Bitcoin in ways like buying stocks and bonds. We provide convenient accounts for Bitcoin and other cryptocurrencies and simplify the process through bank debit and credit card purchases.

Many Price Factors

The stock market as a whole rises and falls on investors’ demand. Just as with stocks, demand directly affects the price of Bitcoin. Demand is the dominant factor, and the widely-accepted influences on demand include news, events, information, political changes, social issues, and overall economic conditions.

Limited Supply

The amount of Bitcoin that can be mined or produced is limited to an overall cap. The supply of Bitcoin in the marketplace at any time also influences the price. For example, typically, a massive sell-off will depress prices as there may be more items than buyers.

News and Events

Like traditional markets, Bitcoin prices can respond to news and events. Buyers may be motivated or more guarded by sudden event and impactful news. For example, the emergence of increased regulation can affect the willingness to buy Bitcoin. One should note, there might be a similar impact by the emergence of regulation on the high tech sector; buyers may be more guarded when considering these stocks.

Market Factors

• Adoption- Major retailers and institutional investors can raise Bitcoin’s price when they agree to participate or accept it. It includes stocks and other stock market type securities like ETFs.
• Supply- Bitcoin has a maximum cap of 21 Million coins. When reached, there will be no more new coins. The fixed supply makes Bitcoin more reliable than currencies that expand rapidly to achieve government goals.
• Small Volume- Bitcoin has a small volume relative to national currencies. Events can have a magnified effect because they impact a smaller volume than stocks, bonds, or other currencies.

Impact of Coronavirus Pandemic

News and events related to the coronavirus offer good examples of the impact on Bitcoin prices. The pandemic caused severe economic dislocations as economies shut down the gradually reopened. Governments made monetary policy moves to reduce the financial injuries to their business owners and citizens. The result may be the widespread use of economic policies to increase the money supply. The increase in the money supply may weaken the values of fiat currency relative to Bitcoin. The pandemic response may spur buyers to buy and hold Bitcoin rather than cash.

At Koinal, we offer an efficient and convenient method for purchasing Bitcoin and other currencies. Our secure portal uses bank-issued debit cards and credit cards to buy cryptocurrencies. Open an account today and begin or expand your crypto holdings.

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