Investors are still in a state of confusion following the ongoing environmental concerns raised against Bitcoin. This has created a battle between buyers and sellers struggling to have a significant influence on the price. For those who are not aware of Bitcoin and the environmental concerns saga, here is a brief explanation.
Recently, Elon Musk, the CEO of Tesla, announced that the car manufacturer would accept Bitcoin as payment for its products. Tesla also invested $1.5 billion in Bitcoin, pushing the price to hit an all-time high. After a couple of weeks, Elon Musk announced that Tesla would no longer accept Bitcoin as payment. The reason was simple – Bitcoin consumes too much energy.
Elon Musk is known by many as an environmental activist, and so investing in something that affects the environment contradicts something he stands for. The argument is that Bitcoin consumes more energy than most developing countries through its Proof-of-Work consensus mechanism.
The growing concerns have created the impression that Bitcoin has no future, and would be cracked down on sooner or later. This has heavily affected its price. However, it is also believed that no one can control the Bitcoin Price. Changpeng Zhao, the CEO of Binance Exchange recently said the strict crypto regulation by China cannot affect the entire market. The unfavorable factors against Bitcoin are battling the positive impact of the Bitcoin halving that happened in May 2020.
Bitcoin went through its third halving event last year. The rewards of new BTCs per block have been reduced by half from 12.5 BTC per block to 6.25 BTCs.
The price has previously seen significant rises in correlation to these price halving events. And yet again, new investors were made aware of this fact and started reappearing after most had left at the beginning of 2018 after the big crash of BTC.
Bitcoin’s price is now moving between $35,000 – $36,000, and I think everyone including myself is waiting for some significant movements to happen in the coming months. But we also have another side which is that it might not happen, which could very well lead to big disappointment and question any correlation the halving has on the price.
So where will the price of Bitcoin head? Are we seeing price cycles, bull, or bear markets? Or is that just a self-fulfilling prophecy?
Either way, there is enough support and sentiment that have seen the price of Bitcoin rise from the low levels of $3000s to $64,000 since the big drop.
Bitcoin is today not working solo. Today, we have a bunch of new exciting blockchain initiatives and new cryptocurrencies to carry the weight, but also bring the promises of further gains.
We have seen Ethereum develop and work hard to create Ethereum 2.0. And after that, we have a group of similar robust blockchains like Tezos, Ripple, Cardano, and VeChain all making genuine strides.
If I could guess?
If I could guess, then I don’t think we will see the quick and big rises in price
in the few weeks ahead. We are past hype and pure greed. A lot of lessons have been learned from Elon Musk’s saga.
It is worth noting that we are still in the development phase of what blockchain and Bitcoin can accomplish.
So I would guess that we will see a somewhat more stable Bitcoin. And by stable, I mean volatility that is still 10x bigger than other markets.
So what does this all mean for everyone? I think it means that if you have a genuine interest in Bitcoin, you might want to increase your investment portfolio to include Bitcoin or other cryptocurrencies as today is a perfect day to get involved.
It means you can engage yourself in learning how Bitcoin works. Decide what role Bitcoin as an investment should have in your overall portfolio. It is to be treated as any other investment, like stocks, commodities (gold, oil, etc), and real estate.
No one can accurately predict the market, so you and I can’t be sure of what will happen. And potentially, any good news or unpredicted rise for Bitcoin, blockchain, or other cryptocurrencies could signal FOMO for new investors and old ones alike.
I can’t know for sure that this won’t happen in the next few months. But what I know I will do is not jump in head first along with the others. I am continuing to invest in BTC and others patiently according to my plan.
I believe that price cycles are things on their own or because we make them be. And I believe Bitcoin and a handful of other cryptos will have their rise again. The question is do you have enough time to prepare yourself before it’s too late?