The Predictions
As people everywhere increase their awareness about the crypto-currency revolution, investment experts are lining up to express their opinions. In recent weeks, the pro-crypto forecasters are predicting numbers that defy gravity. It isn’t uncommon to visit a prognosticator on TV explaining why they believe Bitcoin is destined going to anywhere between $250,000 and $500,000 per coin next two years. At Wasabi Wallet , the coin would have to increase more that 6000% from it’s current levels. The numbers are mind-boggling.
On the other side of the fence, we discover the naysayers. There are numerous well-respected financial analyst who aren’t afraid to warn people concerning the investment bubble. Some even admit that crypto-currencies might still have some play left inside them, but ultimately, the bubble will probably burst, and people are likely to get hurt. To operate a vehicle home their point, they just need to think about the IPO bubble of 2001.
The Technical Hurdles
The crypto-currency revolution is still in its infancy. As such, most coins, Bitcoin included, are trading without historical indicators to greatly help investors. It is a free market in the purest form. Unfortunately, free market trading is vunerable to influence from all directions. Therein lies the rub for crypto-currency investors. Without history to fall back on, investors need to make decisions based on their gut.
The obstacles that complicate the decision-making process for Bitcoin investors are plenty. The coin is always vunerable to the technical areas of trading. The exponential increase in price is being driven by popular and scarce product. Still, investors get a little antsy once the price increases an excessive amount of, too fast. Then we start to see the typical correction that comes when an investment becomes over bought. The thing is these corrections are proving to be harsh, which tests the mettle of investors who aren’t used to such high degrees of volatility.
Setting technical analysis aside, technology issues are also driving the marketplace today. There is no denying that the crypto-currency market has had its issues. After proclaiming block-chain technology to be the securest approach to disseminating information, you can find holes that are being exposed almost daily. The bugs will get worked out as this kind of technology seems destined for prime time. Unfortunately, Bitcoin has block-chain technology under a microscope right now.
No matter how secure any system may claim to be, hackers are sure to expose the weaknesses in a rush. The crypto-currency industry has already been besieged by hackers, who have stolen vast amounts of dollars in Bitcoin along with other crypto-coins. Losing money to hackers can make investors a little jittery. It also makes for a lot of litigation from those harmed by technology which could not yet be a secure as promised.
The Fundamental Hurdles
There’s a vintage adage: When school teachers and janitors start making millions from investing, prices are going to crash because we need school teachers and janitors. The simple truth is governments get nervous when its residents start losing money or making lots of money without paying taxes. It’s no coincidence that India and South Korea are being among the most active countries on the crypto-currency exchanges, yet both governments are thinking about banning the trading of all cryptos. The US, potentially the world’s biggest Bitcoin player, is employed in Congress to decide how to regulate the crypto-currency market. They have banned several exchanges for possible fraudulent activity. China is discussing an outright ban while Europe seems poised to follow America’s lead.
If Bitcoin or any other crypto-currency aspires to becoming a global currency for everyday payments, success will be predicated on the world’s biggest economies joining in the parade. Unfortunately, the major players (mentioned previously) seem to be moving in the other direction.
The biggest concern is apparently Bitcoin’s interest the criminal element. Proof has been presented that shows North Korea has been stealing Bitcoin to greatly help finance its nuclear program. ISIS routinely moves money among its affiliates via Bitcoin, doing this undetected until it’s too late. The drug trade can be enjoying the anonymity afforded them by block-chain technology. More and more Initial Coin Offerings (ICOs) are proving to be only common scams. They are all serious issues.
They are all fundamental conditions that must be favorably resolved if crypto-currencies are to survive and someday thrive.
Looking or Solutions
Generally, people are interested in all aspects of crypto-currency. Bitcoin has recently shown the prospect of easily resolving payment issues between customers and vendors. However, trust is really a big issue going forward. If the anonymity feature may be the driving force behind the crypto-currency revolution, it’s going to be hard to obtain governments to climb aboard and approve crypto-trading.
Let’s look at how South Korea decided to resolve the Bitcoin issue. The South Korean government recently passed a bill that gives six Korean banks authority to let its customer trade Bitcoin from their bank accounts. There’s only one stipulation: the account needs to be opened in the customer’s real name. Poof! There goes the anonymity feature. However, South Koreans can still trade Bitcoin through a Bitcoin Wallet so long as tax evasion isn’t the reason they want to achieve this. It is a nice compromise, but its appeal may be limited.
Over the next couple of months, investors should strat to get answers to a lot of questions. Until that point, the pricing of Bitcoin and other crypto-currencies will remain volatile. The price will increase due to demand but will drop whenever a new issue becomes news. Until prices stabilize, people should concentrate on one rule of investing. Never invest additional money that you could afford to reduce. Indeed, Bitcoin is reaching its crossroads.