Looking back, it is evident that Bitcoin can recover major price drops over time. It happened in 2013, as Bitcoin lost nearly 80% of its value within a one year period. This particular drop left active Bitcoin community members in utter shock and started raising questions about the legitimacy of Bitcoin and blockchain technology as a whole.
Our current nightmarish stage is somewhat analogous to the 2013-2014 price situation. Many traders have been optimistic that a Bitcoin “bull run” would return, but nothing significantly positive has happened to the market since January 2018. Like before, the current market situation has brought about much scrutiny in the cryptocurrency space.
Although many professionals blame strict ICO and SEC regulations for the latest drops, something else is to blame. These restrictions have influenced sell offs, but do not account for the major price fall.
So where is Bitcoin headed in the future?
Bitcoin’s Projected Future
By looking in the past, you may think that Bitcoin will recover and reach record highs in a matter of months. You may also think that Bitcoin will continue its depreciation over the coming months and years. But here is our take on the situation.
Through November 2017 – February 2018 Bitcoin experienced a wild adoption spree, as millions of people started investing and believing in Bitcoin and its altcoin competitors. During this period the cryptocurrency market cap rose from around 200 billion dollars to a whopping 800 billion dollars of market cap.
This period introduced the idea of decentralized assets and blockchain technology to many new people in many countries. Some of the biggest adopters of this technology include Korea, Japan, China, United Kingdom, Switzerland, and more.
As ICO ad bans hit the news, people started selling off their crypto-assets and the value began the plunge we now recognize today. But the vehicle that has driven the price even further is not the regulations nor the US government’s perception of Bitcoin. The greatest factor causing these market fall lies in the hand of the people. And no: I am not talking about sell-offs.
Ever since February 2018, the value being transacted on exchanges has become a fraction of what it once was. There has been a lack of interest in Bitcoin and other cryptocurrencies due to their volatility. Many people who once saw Bitcoin as an easy “get rich quick” scheme are now left wondering why they ever bothered investing. Google trends show proof of this loss of interest.
Here is a graph from Google trends tracking the number of searches for the term “Bitcoin” over the past 12 months. Unfortunately, you can see the steep decline of popularity after approximately December/January 2018. This representation summarizes the hype that was once associated with Bitcoin and its price drop.
Shown above is a graph from CoinMarketCap that shows Bitcoin’s price (in green) and market cap (in blue) fluctuations over the past 12 months. If you compare this graph to the Google trends one shown previously, you may notice that both graphs follow an almost identical path. These two graphs show the close relationship between the public’s demand (Google Trends) and Bitcoin’s value.