What Can Investors Expect From Bitcoin?

The future of Bitcoin has recently become a hot topic. The first generation coins dropped from a record high of $69000 to more than 70%. In order to regain its foothold, the transaction amount will be less than 18000 US dollars by June 2022. In this confusion, reactions vary from place to place.

Bitcoin Vision

Satoshi Nakamoto’s idea of decentralizing money is boring Bitcoin. Bitcoin adds many other technologies, causing confusion. This was considered an unrealistic goal 10 years ago, but it has attracted the attention of many people, including large investors. The cryptocurrency we see has complex information decoding technology behind it, which aims to defeat the efforts of fraudsters. Even with this technology, Bitcoin cannot achieve its goals and faces many challenges. It is characterized by sharp price fluctuations, mistakes and scandals.

Bitcoin Vision Centered Activities

Recently, so-called security problems are rampant. For example, in February 2022, the two were arrested on suspicion of conspiring to launder US $4.5 billion of cryptocurrencies in 2016. During the arrest, Lisa O. Monaco, the Minister of Justice, said: “This is the worst financial seizure ever. Cryptocurrency is not a refuge for criminals.”

In addition to scandals, the process of acquiring the asset has recently made headlines, raising questions and doubts about the environmental impact. According to the estimate of the University of Cambridge, Bitcoin alone has an annual power generation of 132.48 megawatts(TWh). With this kind of energy, carbon dioxide emissions are relatively high. Although the last mining was completed in 2020, it has been proved that the work has been completed, and a large amount of carbon dioxide has been released, which requires a large amount of energy consumption to affect the environment.

Due to the above Bitcoin related problems, the asset started a red transaction, which lasted for a long time at this unfavorable price level. It is amazing to review the price dynamics of Bitcoin. In 2011, only the price of about $1 has undergone positive changes, rising to $69000 by the end of 2021, but falling again to about $17000(subject to June 18, 2022). In this process, the price changes greatly, and there seems to be no stable position. The falling price has brought some concerns about the interruption and prevention of Bitcoin exit to trading platforms such as Binance. The CEO said on Twitter that the temporary interruption would solve the problems accumulated due to blocked transactions in a few minutes, but this brought fear to investors and other ambitious people.

If we look at how these prices change and are not centralized, who will control the price? Compared with fiat currency, economic policy does not apply to Bitcoin, so demand, supply and mining costs are the only forces for this change. 2020 is the last mining year, and other factors lead to reduced demand. The global economic crisis, general inflation and Russia’s invasion of Ukraine caused by the new currency swap are the core issues to deepen the market price that Bitcoin has struggled with.

although the transfer of power is the core goal of the creation of these assets, it has recently been argued that whales(people with a large number of bitcoins) are the people who control the price. If this is true, how can they profit from low prices? Of course, the goal of any investor is to gain the most from any investment. If there is no benefit now, are they planning something that the insiders do not know? Or have they carried out their mission and seen smoke?

What’s next?

Small investors pouring into the Bitcoin market, hoping to make profits in a short time, are the forces behind the prosperity of the market. But with the collapse, the industry was considered likely to liquidate its holders. Katie Martin, the author of the FT’s long-term opinion column, commented that Bitcoin is the most speculative in the history of the planet.

With the development of the situation, there may be a recovery in transactions in areas of extreme fear, but it will not occur immediately. As regulators promised to “persevere”, it became unclear which rules would actually work in the future. However, there is a large amount of evidence that the encryption industry will gain more trust and eventually achieve a certain degree of stability when regulators successfully formulate rules.

although this view of recovery is feasible, it is easy to accept China’s view. Here, a newspaper of the CPC published an article warning against investing in Bitcoin. Some people think that the price will tend to zero; therefore, investors are warned not to put money into Bitcoin. It is further understood that Bitcoin is just a line of code, and its return is the result of buying low and selling high. According to this article, if investors lose confidence or sovereign countries legalize Bitcoin, it will almost return to its original valueless value.

These two views put a man in a dilemma, and he did not know what would happen. No expert can even predict the future clearly. This is only a speculation based on some historical information and data. The most important thing is to know that Bitcoin is mainly affected by celebrity comments, government decisions and activists’ reactions to some phenomena related to Bitcoin.