Bitcoin crash woes the investors, as 2018 approaches near
Dec 17, 2017 Posted / 1722 Views
Some call it the most significant invention of the present era while others call it a bubble. Nonetheless, everyone has one or the other thing to say about Bitcoin. The price gain this year for the currency was humongous and for a change, everybody did not begin reciting their New Year resolutions but rather Bitcoin- is it going to stick on its resolve of profiting the investors. As 2018 is approaching near, the prediction market has warmed up and analysts discuss their worries on its slash.
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The evaluators reckon that it is certainly a genuine distress that is doing rounds and the investors are rightfully alarmed as the value of Bitcoin escalates, it seems that balloon is being filled with an extra air, ready to burst anytime. But let us first determine that why there is the likelihood of a crash in the first place.
This year Bitcoin price didn’t just double it inclined by an astounding 1,500%. It is hard to imagine that why people would fall into the frenzy for a virtual coin that perhaps does not hold any intrinsic value and is largely unregulated. Human behavior explains it the best. The analysts call it “behavioral finance” - a relationship between human psychology and our financial decisions.
With any new innovation, there are two types of adopters- one is called the “devotees,” while the second one is called the “sheep.” The devotees create the Bitcoin mania, and these are basically the investors who are buying cryptocurrency for no better reason but to formularize a democratic association. They feel that by giving up their centrally controlled fiat currencies and moving towards a decentralized digital currency they can bring sovereignty and freedom in their financial dealings.
However, the essential part of the mania depends on the investors with “herd instinct”. This herd instinct is fostered because of their fear of missing out on an opportunity and losing on their chance to get rich quick with a new investment proposal.
The analysts feel that these sheep investors can make Bitcoin to crash because they mindlessly follow the herd without bearing any consequences in mind for the longtime damage they can pose. It is expected that in the event of a Bitcoin crash, the only rescuer of the Bitcoin value will be the devotee investor. If those Bitcoiners who exactly believe in the dream of a financial freedom of the world, hold on to their investments, prices will only drop to the extent that sheep investors go out of the scene.
Analysts assume that if Bitcoin does crash sometime in future, the result would be catastrophic in specific respects. It undoubtedly doesn’t cause a systemic jeopardy to the economy of the world. However, it will unquestionably cause a pertinent commotion in the financial markets where a generous number of its buyers are functioning like U.S., Japan, and South Korea.
The investor believes that cryptocurrencies will extensively weaken in the aftermath of a Bitcoin crash, which will take years to revive it. There’s also a reasonable possibility that it will not be able to revive back to the present level. One can definitely argue that prices during the time of last Bitcoin crash (which occurred between late 2013 and early 2014) were recovered to greater heights. But analysts will remind you that the variation between the numbers of “sheep” investors between then and now is large.
Interestingly, it took Bitcoin about four years to elevate from the price of few cents to $500.00, however, it took just one year to reach $5k. All the better, its ascension to $18,000 took three months.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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