Bitcoin resumes its plunge, falling from as high as $8,400 just two weeks ago to $6,300 now. Half a year ago ago when Bitcoin was in the $17k-14k range, I predicted it would go a lot lower, and it has. The most optimistic scenario is Bitcoin hovers around $3,000-$6,000 for awhile, but a retest of $11,000 or higher is out of the question.
The first reason is: the entire coin market, which includes Bitcoin and altcoins, is too big. There’s no justifiable reason why a currency that is so seldom used for practical/commercial uses should be so highly valued. Altcoins have virtually no penetration into the economy. Bitcoin has seen only a tiny amount of use; the majority of Bitcoin transactions are people and bots moving money between wallets or exchanges, not actually buying stuff.
I remember in January 2018 saying to a friend that I couldn’t understand why something called ‘oyster coin’ (and at least two-dozen others) was valued at $300 million–for what? Or why ADA/Cardano was worth upwards of $20 billion despite having nothing for show but a glossy website, a ‘team of security experts’, and a fancy bull-themed wallet. It made no sense.
Second, to quote Vox Day, the crypto currency ‘scene’ has been ‘converged’ (meaning taken over by SJW-types). I remember this year on Twitter seeing tons of cringe-worthy posts about International Women’s Day, as well as exchanges and ICOs promoting diversity and so on. Roger Ver, love him or hate him, at least has not been converged. But cryptocurrency has been taken over by social-justice types, assuming it was never not converged in the first place. I cannot continue to support something that has become an apparatus for leftism.
Third, the psychology has changed and people just aren’t buying the dips anymore. The bounces are much smaller now than earlier in the year. When Bitcoin fell from $19k to $6k, it rebounded to $12k. Then it fell to 6k again, but rebounded to $10k. Most recently it fell to $6k for a third time, but only got as high as around $8k before falling back to $6k.
Forth, there is hardly anyone left to buy. When you go on Twitter and see all these experts celebrating Bitcoin going up, you can be certain they are already fully invested. The only people celebrating are those who own Bitcoin. So if all these people own it, who is going to be left to buy.