View profile

How Low Will It Go?


The Block

August 22 · Issue #59 · View online
Weekly curated #cryptocurrency news and commentary.

This is The Block.
Ah, Bitcoin. You’re a crazy mofo. If you’re not jumping up or down by hundreds of dollars, you’re frustratingly sideways for weeks on end. Bets against you are at a record high. As for the thousands of altcoins pegged to Bitcoin’s value, it’s a “wait and see what Bitcoin will do” for price movements.
This can be excruciating for those in the thick of things.
As for me, I’ve been paying virtually no attention at all to either Bitcoin or altcoins–mostly because I’ve been busy with moving to a new state–but also because, when there’s no news, there’s no news. There’s some value in stepping back and letting things be. I have a portfolio, down significantly from its all-time high, but up significantly from my original investments, so I have the luxury of letting things ride. Not everyone is as lucky. If you’re anxiously hoping for anything good to come down the pike, I feel your pain.
If you’re outside the investor group, now might be a good time to put your hand in. For play, you might be able to win a real $1,000. And it could be a great way to learn about cryptocurrency in a safe environment.
Summer is a notoriously slow time for any news, and the cryptocurrency market is no exception, and previous summers have proven to be a mostly negative trend. 2018 is no exception. But there really is reason to see light beyond the trees.
And I’m not talking short-term rallies here. I’m talking about significant decision-making which could provide a long-term boon to Bitcoin and to cryptocurrencies globally, or at least here in the U.S.
In the meantime, hopefuls are still full of hope. Payments evolve. The human race evolves along with them.

How Low Will It Go?
Are bears starting to going into hibernation? As you can see from the chart below, the yellow curve that connects the lower-highs since the peak of late 2017 indicates that bear momentum is steadily slowing.
Bitcoin’s price action is logarithmic in nature. The price of bitcoin is likely unable to go below $3,900 at this point, and within a few months that floor will be around $6,200.
Perspective is everything, of course.
2013. This bull run was Bitcoin’s biggest rally on a logarithmic scale. The bear market that followed lasted for about 1.5 years. 2018 has been highly negative for Bitcoin and cryptocurrency, but back in 2014 through part of 2015, the doom and gloom FUD was fierce.
It’s hard to believe, but the massive bull run of 2017 was quite small compared to the 2013 bull run, and the drop of 2014-2015 dwarfs our current bear. Someone who bought Bitcoin in 2012 for 3 dollars could sell for as high as $1,300 in 2013, a gain of over 43,000%. Compare that to the 2017 bull run: Buying for $200 in 2015 and selling for $20,000 in 2017 is great, but it’s actually “only” a gain of 10,000%.
Because Bitcoin has a finite supply, the smart investor and/or trader should really be looking at the percentage gains, not the actual dollar value. It doesn’t matter if Bitcoin is worth $1 or $10,000; buying $100 worth of Bitcoin and it going up in value by 10% gives you a 10% on your money. The same principle applies if price drops in value by whatever %. The current price itself is only meaningful in relation to the price you bought in at.
And at the current prices compared with the speculative value once institutional investors begin piling in, the percentage gains to be had are still very much a positive note.
Links of Note
An oldie but goodie.
Learn Blockchains by Building One
Stablecoins: designing a price-stable cryptocurrency
Bitcoin’s energy consumption isn’t as bad as you think
Bitcoin Energy Consumption Could Drive Innovation
All Australians Can Now Pay Their Bills With Bitcoin
China Prohibits Cryptos Again this Time Banning all Commercial Venues
Scammers are blackmailing men into sending Bitcoin, according to the FTC
Ripple's goal is to "have xRapid out of beta by the end of the year", states CTO David Schwartz
That’s it for today. Thank you for reading!
Did you enjoy this issue?
If you don't want these updates anymore, please unsubscribe here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue