Bitcoin has been loitering around the four-thousand-dollar mark for a while now, but where does this fit into the bigger picture of crypto’s growth trajectory overall?
Bitcoin’s fame for volatility has not really matched reality of late – at least compared to the old days. Now we’ve seen a consistent resting price point of just under four thousand dollars since November last year, with fluctuations of around $300 either side of that. You might say it’s got a bit tame these days.
But despite the price stabilisation, development in the space is moving faster than ever. So, the question this begs is how can we understand where we are in the adoption process?
Have We Got Off the Bitcoin Roller Coaster?
So, is that it? Is the roller coaster over? Well let’s look at how these non-movement periods have been in the past.
If you look at the coin’s history, it has spent more time relatively stable than wildly fluctuating and for a market dip, it’s still at an all-time-high. A price floor of around four thousand dollars is still far more than any other floor seen in the past.
Before the 2017 bull run, but after the coin had its first real boom up to $1,000, bitcoin struggled for more than two years to get above the $800-mark, spending most of that time well below that. We’re currently stabilised at five times higher – still in great shape on any asset health trajectory.
More Than The Price
Price isn’t the only – or indeed even a particularly good – metric for measuring the value of bitcoin. Charles Hoskinson of Cardano, speaking in interview with Crush The Street, explains that there are many other signs which give an indication of where things are heading.
“Liquidity, consumer adoption, infrastructure. Every year just keeps getting better. I mean we have so many on and off-ramps, there’s bitcoin ATMs everywhere. I was in Mongolia not too long ago and a camel-herder had bitcoin, so when your Mongol camel-herders are buying the asset, that tells you that things are moving in the right direction.”
And he’s right. The industry has been in overhaul for a year now and will continue to be whilst other necessary factors such as those outlined by Hoskinson – consumer adoption and infrastructure – as well as other ones such as regulatory frameworks catch up with the technology. Necessary pruning is going on, but this “partial closure for refurbishment” will facilitate expansion in the future.
Real Value of Bitcoin
So, with all things considered – the usability, the infrastructure, crypto ecosystem upgrades which are being implemented at the moment, as well as the price – can we say that bitcoin is really worth somewhere around $3.5 to four-thousand dollars? Of course, nobody can tell you for sure and this is definitely not trading advice, but it appears to Hoskinson be sustainable. Hoskinson continues in the interview:
“You always look things like trading volume, you look into market accessibility, … the news cycle [and] you look into the cost of production. If you want to compare it to a commodity market like oil … there’s all kinds of infrastructures there which simply shut off after you get below a certain price per barrel. Those [metrics] give you a good indication of where the industry is at.”
The general signals Hoskinson mentions are fairly green right now – showing that what the industry is really waiting for is regulatory infrastructure to catch up. Once investment firms can seriously move into the space and have a framework to trade, then we should start to see concerted upward movement again.
Alex has been putting words on paper since he was old enough to hold a pen; when he bought his first bitcoin in January 2017, those words discovered their place within crypto as well. He holds a master’s degree in international relations from Leiden University in the Netherlands, and his special expertise lies in European cryptocurrency regulation.