With a frantic pace of growth in prices for the cryptocurrency, its users expected that Bitcoin would gain mass popularity in just a few years. These expectations turned out to be unrealistic, and after a staggering takeoff, Bitcoin is falling again. However, things are not that simple as it may seem. Let’s try to figure out the reasons for Bitcoin being dumped.
Understanding the rollercoaster
Such excessive rate swings are not new to Bitcoin.
At the beginning of Bitcoin’s development, it once fell from $32 to $2, which is 94%. In 2013, it fell from $260 to $45, that is, by 83%. In 2015, it dropped from $755 to $150, near 87%. Then in 2017, Bitcoin soared up from $974 to the $19,783 mark, showing a tremendous 2000% growth, and then dropped down again by 83% of this price.
After that, Bitcoin was more or less stable for quite a long time and kept its rate at ~$6000. But by the end of 2018, Bitcoin suddenly began to fall again. As of rising, it has dropped almost twice, to the price of about $3000. Let’s try to figure out what had an effect on it?
Bitcoin mass adoption
Today there are still many obstacles on Bitcoin’s way to mass adoption. Here are several ones:
- Technical (the problem with transaction scaling and block mining).
- Security (instability of the course, lack of user protection against fraud and hacks).
- Mining (Bitcoin mining requires lots of electricity and computing power which make the mining process difficult and non-cost-effective).
- Overall complexity (Blockchain technologies seem too complicated for masses).
These are basic things that don’t allow society to get any more interested to Bitcoin than just as a way to get rich quickly.
What pumped the price up?
- Media and trading hype.
- Politics and government interest.
- Market speculations and holders.
What dumped the price down?
- Regulation and uncertainty towards the crypto industry.
- Switching to other nodes after hard fork.
- Overheated market.
Since today all the cryptocurrencies are somehow interlinked with Bitcoin, the Bitcoin fall has led to the collapse of the cryptocurrency market. For example, in 2018 Ethereum went down from $1,400 to $103, Ripple fell from $3 to $0.3, and many cryptocurrencies have become completely worthless.
Things are, however, not so bad. Leading crypto enthusiasts are optimistic.
Do not panic at any dip in Bitcoin’s price. If this is a Bull Market then these dips will happen frequently — profit-taking, nervous new investors etc. Look at any Bull market. It is not a straight line. It’s: up a good amount, down less. Up a good amount, down less.
Such drastic swings of the Bitcoin price seem to be attracting new attention and speculative interest for the currency.
The community around the cryptocurrency is already able to support the survival of this technology and Blockchain will develop and scale faster and faster. Although today Bitcoin is the main crypto and many analysts see its bright prospects of the industry. However, the fate of Bitcoin remains unknown…
Where to store Bitcoin?
There are three main ways to manage Bitcoins:
- Centralized exchanges
- Hardware wallets and full node
- Light wallets (custodial and non-custodial)
On centralized exchanges your assets are not totally under your control, your private keys are stored on the exchange servers, they can restore access to your funds in case you lose your password, but centralized services may be unavailable or hacked.
Hardware wallets download the full node, it is a long process and if it is be broken or stolen – money will be lost forever. Light custodial wallets it’s almost the same as centralized exchanges, so the non-custodial wallets it’s the best solution to store your assets in a decentralized way.
Atomic is a non-custodial wallet, all private data are stored in an encrypted manner on the end-user device and never leave it, but if your device will be lost or broken you can restore access to your wallet on the new device with your mnemonic seed phrase, so your money is totally under your control.
We are happy to provide you with the most convenient way to manage all of your cryptocurrency assets. Download the App now and enjoy your assets being safely managed!