As Bitcoin is so volatile, any negative news affects its price. And in recent times they were not few. Setbacks include the growing possibility of regulatory action worldwide, in countries such as India, South Korea, China and the United States, a record theft of $ 500 million on the Japanese exchange Coincheck, fear of price manipulation, recently Evidence from an article by two economists who demonstrated a case in which it knew to be the world’s largest exchange Mt. Gox and the ban on crypto ads on Facebook. But is Bitcoin’s decline just a conjunctural correction? More detail about it can be found https://crypto-profit.io/
Understanding the price of Bitcoin
The classic modalities of asset analysis, the fundamental and the technical, do not seem to provide answers to the Bitcoin phenomenon. “Technical analysis only needs an asset with liquidity, parts that buy and sell and its behaviour is analyzed. But it is difficult in Bitcoin for being so volatile, although they cannot be analyzed with a future flow of funds, with sales, with profits or losses.
Fundamental analysis, on the other hand, also has difficulties. First of all, a crypto asset is not a traditional company. New technologies generate discontinuity; generate intangible assets and different evaluation models. Internet opened the door to this, for example, Facebook started making money years after going public, but its potential was seen and it had value in its number of users. This escapes people like Warren Buffet, they stay out, “explains economist Nicolás Litvinoff, from the financial education company Estudinero.net. “You have to read the project’s whitepaper, review broadcast issues; like how much is the limit or if it is pre-minded, who is the development team behind and what value proposition theyoffer,”saysLitvinoff regarding the fundamental analysis of the most popular cryptocurrency.
“It is increasingly difficult to do technical analysis. First, because it is a very new technology and few understand it technically. Also, I never quote anything 24/7, it is very difficult because you look at volume or price, it is always changing, there are people who buy and sell all the time “, explains Florencia Galvan, economist (UBA) and financial advisor of the finance application iBillonaire . “The topic scares me a little, because I hear all the time that a large number of people want to enter the ecosystem and many even take out credits to enter. Many do not know what they are getting into, because Bitcoin is an asset and not a currency. The classic concept of currency has three properties: means of payment, unit of account and store of value. Bitcoin is not used to pay and is too volatile to be a store of value.
On the other hand, some rises in the value of cryptocurrencies may be artificially driven and not for market reasons, as you recently learned was the case with Mt. Gox and its plan to manipulate the price. “The case of the Tether digital currency, which has a one-to-one parity with the dollar, and the relationship it has with the Bitifinex exchange, may be another case of price manipulation and would explain part of last year’s boom”, Galvan concludes.
In Livitnoff’s vision, the issue does not go through the structure of the crypto ecosystem. “I don’t think the current price has to do with exchanges or mining. Many people who operate bitcoin do peer to peer or perhaps on a foreign exchange. Many times fiat money is used to enter, but it is possible to move with comfort and privacy by moving cryptocurrencies between exchanges. Neither on the mining side, is Ethereum now switching to the proof of stake system, which it does is break with the centralization of miners. In Bitcoin it is where there is more centralization, but other altcoins like litecoin do not have it”, says the economist. Livitnoff also does not believe that the current drop is due to the current situation, “events such as very hacking hamper the price, but always in the short term.
So if you want to invest in bitcoin, then it will be good decision as according to expert bitcoin rates will get increase in future.
Author: 9TP
Admin is a professional blogger and digital marketer at 99techpost. She writes about Digital Marketing, Digital Transformation, Technology, WordPress, SEO, Web Design and Development . You can also follow us on facebook & twitter. Feel free to contact us if you have any queries.