The BTC to USD price has received a lot of media attention since the end of last year. December 2017 was a crazy month for Bitcoin and cryptocurrency in general. It started out with a price of just over $10,800 before reaching the wild heights of $19,300 and closing the year out with a price of $13,800.
That type of fluctuation was never going to be sustainable, and it was interesting at that time what the future held for the currency and where the price would settle. January, though wasn’t a good month, as Bitcoin repeatedly fell in price throughout the month and by early February the price had fallen below $7,000.
Bitcoin hasn’t rebounded yet
Since that time the price has been a lot more stable and hasn’t had those wild changes, but the price hasn’t ever looked like getting back to how it peaked in December and now sits comfortably under that $7,000 mark. In order to ask the question of whether Bitcoin will recover or not, you need to first ask why it got so high in the first place.
There would have been a lot of people who would have bought Bitcoin at that December price only to be left seriously out of pocket when its price dropped off the cliff. That’s the nature of the beast when it comes to investment, and they will be sitting on their currency now hoping to see a recovery of the price back towards its December peak.
Where will Bitcoin sit when the cryptocurrency rates settle?
When you look at the GBP to USD rate, then you’ll see a similar rate of peaks and troughs as you would so with the BTC to USD rate, but if you compared the two on the same graph, then you’d see the differences would be huge and it’d show the instability of Bitcoin. For reference, in the last five years the GBP to USD rate hit a high of just over 1.7 in 2014 and a low of just over 1.2 in 2016. That’s a drop of nearly 30% which can have huge implications.
At the same time, Bitcoin went from having the USD price of around 100 in 2013 to nearly 20,000 at the end of last year, which works out to be a rate change of nearly 20,000%. And from that December price to now? Well, that’s been a drop of nearly 66%. These numbers highlight the volatility of Bitcoin and cryptocurrency in general.
While there have been significant changes in the GBP to USD rate (as there are with any currency), they don’t compare to the huge changes in the price of Bitcoin. It seems unlikely though that it will ever settle at the high it once achieved. It’s such a long way back, and it’s doubtful that we’ll ever see the type of boom that we did at the end of 2017. However, when it comes to cryptocurrency, nothing can be certain.
Will it stop its downward trend?
If you were to ask someone in the street to mention the first cryptocurrency they can think of, those that will be able to name one would almost certainly name Bitcoin. That’s a strong brand for the coin and one they will try and build on, but the competition is going to be tough. It has shown brief glimpses of increasing in 2018, but every time it does, it’s soon met with another slide.
One of the biggest problems of Bitcoin and those looking to make money off it is that there is an increasing level of rivals who are offering what Bitcoin can’t. For this, you only have to look at Bitcoin’s two closest rivals, Ether and XRP.
Ethereum opens up a whole new way of dealing with cryptocurrency when it comes to its smart contracts which could change the way that people do business across the whole world. While not competing directly with Bitcoin, Ethereum’s innovative platform could attract many investors. XRP is a currency that is competing directly with Bitcoin as it excels where Bitcoin fails with its scalability, transaction fees and transaction speeds.
This isn’t good news for Bitcoin as this is just an example of two currencies that offer different things to it, which one day may mean that Bitcoin falls away as the number one currency. If it does, then its price will continue to fall as Bitcoin struggles to get around the issues it has been trying to combat for a long time.
Is there any good news for Bitcoin?
Bitcoin is still a huge brand, and that statement about the overwhelming majority of people only knowing about Bitcoin and no other cryptocurrency is a powerful tool for the coin. If it can keep hold of that status, then it will remain strong, and if the market as a whole rises, then Bitcoin could well rise again with it. If it overcomes its issues, then there will be fewer reasons for anyone to turn away from Bitcoin.
These are concerning times for people who have invested a lot of money in Bitcoin as there could be a lot of money lost. At this stage, it seems highly doubtful that it could ever return to the heights that it reached in December 2017 as that was a crazy time for the market. There are many currencies that are trying to find that high again, but they might be waiting for a very long time.
So what does the future hold?
The cryptocurrency market has been notoriously hard to predict, and the future of Bitcoin will be fascinating to track, and it might be able to recover to a much higher level than it is today. It will be difficult for it to achieve what it has before, especially as the level of competition increases.