Bitcoin (BTC)–As we enter the ninth month of a prolonged bear cycle for the crypto marketplace, one that has watched as the price of Bitcoin fell from near $20,000 to a fluctuating valuation under $7,000, the final quarter of the year looms large. In 2017, one of the largest bull runs to every hit the industry occurred, elevating both Bitcoin and altcoins to over-valuations that has likely caused the lingering selloff.
Despite the depressed price, 2018 has been one of the better years for both the number one cryptocurrency by market capitalization and the general industry. Crypto adoption is at an all-time high, with big players like IBM already entering the market for crypto-backed global payments. Blockchain has become more than just a buzzword, with companies as big as Facebook establishing new divisions to explore the space. The reasons to stay bullish on BTC as we round out the final quarter of the year are numerous:
Growing Adoption Can Even Out Price Speculation
Of all the problems facing cryptocurrency in its current iteration, the most pertinent is the rampant price speculation fueling the industry. On one hand, it brings billions of dollars worth of interest and capital into the market, thereby driving new development and greater intrigue. However, it also creates the conditions for an industry that is more concerned with price movement in the near term rather than building long term value and legitimate societal adoption–a feature that should be inherent in a technology. Bitcoin adoption has continued to rise throughout 2018, with more people both buying into the currency and looking for ways to use it. As BTC becomes a ubiquitous currency, one accepted at major retailers and online sites as the norm, the speculative frenzy of the market will be dampened by the people buying and selling BTC as a legitimate source of commerce. That bodes well for long-term price appreciation, albeit in a way that does not exhibit the boom-and-bust cycles that have characterized cryptocurrency valuation to this point.
Bitcoin is Gaining Market Dominance
While BTC’s market dominance has swayed throughout 2018, the coin has managed a greater than 50 percent market share for the last month, with a linear trajectory upwards since May. This gives indication that investors may be losing confidence in cryptocurrency as an investment vehicle, but still feel secure in BTC relative to the rest of the market. As altcoins continue to take a massive hit and retrace the bullish run to end 2017, Bitcoin could become the beacon currency to rally around. Much has been made of the glut of projects littering the cryptocurrency space, and this bear cycle could be as much about removing the chaff from the market as it is a price correction.
Venezuela and Lingering Global Financial Crises
Despite the tragedy being experienced by the average citizen in Venezuela, the country’s ongoing crisis over hyperinflation of the Bolivar is providing a case study for cryptocurrency. Bitcoin and DASH adoption in the country has gone sky-high since the Bolivar tanked in value, despite the government’s attempts to institute a state-backed digital asset based around the value of oil. If there was one facet of 2018 to signify the legitimacy of cryptocurrency, it lies in the ability for people around the world to separate themselves from government fiat–and thereby the monetary policies of their country–through the use of Bitcoin and other currencies.