What will the bitcoin price chart look like this year?
Just recently we saw a bounce in the bitcoin price from around $3.5k to almost $4k. The momentum was not sustained that much as the price dropped back. However, there was something different about this jump. It was the typical fast upward movement bitcoin usually has, and for a moment it looked like it was going to stay there.
As I write this, the price is gradually heading up there again. No one who has been attentive in the community is surprised by these moves. Finally, the institutions are coming in. Also, there is so much positivity about the prospect of cryptocurrencies. In fact, JP Morgan, whose boss once blasted bitcoin, has now created its own coin. Laughable, isn’t it?
So, is the bull back? I think the signs point to the fact that the bottom is in already. While I do not think bitcoin will rally as it did in 2017, I think we will see a less intense rally. Late last year, I made a 2019 prediction that there will be no massive bull run but small runs from time to time.
Everyone is now learning how to short bitcoin. In case you have no idea, here is a guide on shorting bitcoin. When a trading idea becomes general knowledge, it becomes a setup to get rekt. There is so much optimism about bitcoin today that wasn’t even there when the price was at $20k.
Is this a call to buy? Absolutely not! You make that call yourself depending on your own strategy. As far as I am concerned, bitcoin is a currency. I save in bitcoin, I do not consider buying bitcoins an investment. An investment, in my opinion, is supposed to work to produce income for you. Bitcoin just sits there. It is not like shares in a company, which produces dividends. I do not consider bitcoin a commodity. A commodity like silver or copper can be used up to make things, hence they have demand outside their “store of value” notion. Even gold has demand outside its status as a means of value exchange. Gold is used for ornaments, clothing accessories, building finishes, etc.
Bitcoin is more on par with the US dollar. The US dollar is a currency backed by the US government and steered by the US Federal Reserve. Bitcoin, on the other hand, is a currency based on technology that is crowd-built and steered by the natural forces of demand and supply.
Why should you own some bitcoin? It is because the government of your country can make mistakes and blunders. The value of everything you own in the country’s currency can be wiped out by someone’s foolishness. I suggest owning an amount of cryptocurrency that is enough for you to start over if anything happens.
But nothing can happen to my country and currency! Well, I don’t doubt you, neither do I doubt your faith. But there is one thing you can count on in this life; bad things always happen. And it often starts quietly in the middle of the good times. I am not predicting something bad will happen, in fact, I hope no such thing happens. But I am prepared just in case it happens.
Why should you own some bitcoins? It increases your diversification in your exposure to cash. In your financial portfolio, cash is a position and it is good to have some cash always so that you can latch on opportunities before they get cold. Most people have one currency as the only cash option. Some have three or four fiat currencies. Bitcoin is a way to be in cash without being in fiat. You can liquidate your holdings quickly or even use it as a currency of payment for goods and services.
Why should you own some bitcoins? It is fast becoming the currency of the internet and on a tenacious path to becoming the currency of the future global world. The major reason it is not widely adopted today is that everyday people find it difficult to understand it. This is because they don’t even understand how money works today.
A businessman once asked why he should own bitcoins. The guy answering him said that it is because his bitcoins will not be frozen if for one reason or the other his assets gets frozen by the government. The next question the businessman asked is how to buy.
Everybody has different reasons why bitcoin is appealing to them.
Finally, I hope to see small bull runs throughout the year. Although, I don’t think we would see another all-time-high in 2019.