Bitcoin has been toying around with its pricing for a fair while now. Should you HODL to your cryptocurrencies or should you start divesting your assets? The past is not much indication, and we will have to look in the future to garner a clear answer.
What may follow now? Well, April brought back as much as 33% of the value of the cryptocurrency. Still, Bitcoin managed to tank down to $6,000 – not a too convincing metric, not by any stretch. But then again the value of Bitcoin has been like that. In 2017, it lost nearly 60% of its value. Then it peaked and plummet for another 70%. I mean, come on, Bitcoin! Can you stick to your guns for the nonce?
What drives the value of the cryptocurrency, though? Well! Social media sentiment does, in fact, determine what the likelihood of Bitcoin’s pricing going one way or another is. Indeed, news shared on Facebook and Twitter by people who seldom post about cryptocurrencies.
If you think that cryptocurrencies have lost their bastion – the social media, think again. Facebook is effectively reversing its ban on cryptocurrency ads. While binary options and ICOs are still debated, the social giant is back in full swing. This is what sitting through grilling in front of a Commission and the European Parliament do to your courage.
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A research has shown that indeed people who seldom comment cryptocurrency pricing, particularly Bitcoin, may have an effect on how the cryptocurrency fares. This is an interesting observation. Does it mean that every time Bitcoin slumped doom & gloom had been shared on social media? Looks like it!
Meanwhile, Coinbase’s customers, the U.S. largest exchange, or nearly so, are now giving up the gun on Bitcoin. Investors are bailing on their Bitcoin investment and this may be yet another morass for the shiny chunk of digital coin.
All started in April when the value bounced. A simple explanation would be that people have somewhat lost their trust in the cryptocurrency and the recent upsurge in its value has prompted them to act expediently and claw back some of their investment.
500,000-customer Study Shows…
According to a study featuring 500,000 users on Coinbase aged 25-35, they are less inclined to continue and invest in Bitcoin and would much rather seek alternative sources of investment. Still, Coinbase has not sought to refute those claim in the slightest for the time being.
One of the reasons why Coinbase’s Bitcoin base has been waning is that estimated 1,000 crypto projects have already failed this year. And we’re just in the middle of it. Meanwhile, local regulators are revving up their restrictions. The U.S. Securities and Exchanges Commission (SEC) has had ICO’s and binary options in its crosshairs for a fair while now.
With the regulatory noose tightening, Coinbase’s customers may have all the more reasons to tread carefully through the murky ups and downs of the cryptocurrency.
Can Coinbase Lose More?
If there’s a genuine sentiment of withdrawal and downturns in the value follow, we will see Bitcoin users dwindle on Coinbase. With the increased incidence of hackers taking advantage of Bitcoin, regulators are even sterner towards the cryptocurrency. Bitcoin is also gradually losing its charm and becoming a marginal cryptocurrency, even if it’s synonymous with what blockchain means for example.
How can the crypto asset be saved? The easy question is – by introducing more stability. But is this possible at a time when hackers and malfaisants have infiltrated so much of the crypto currency’s infrastructure? With the staunch anonymity it sports, it would be nearly impossible to restore credibility.
Not only customers have to trust it. Central regulatory bodies too must put their confidence in it for it to take off in full. With so many alternatives right now and people seeking ways to convert cryptocurrencies quickly into FIAT money, Bitcoin may be indeed on the wane.
Not only that, but the technical (near) impossibility to mine Bitcoins easy is another thing that may see Coinbase’s main supply of asset slump. What needs to be done, if Coinbase wants to forge ahead, is to revitalize the portfolio. If users are not so keen on Bitcoin, then Coinbase ought to simply shift away from it.
Why Is Bitcoin Down in the Doldrums, Though?
According to Yukio Noguchi, an advisor at Waseda University, the introduction of futures market has been largely to blame for the continuous slump of Bitcoin. In other words, apart from the sentimental reasons, there are well-documented technical ones as well. Noguchi has stated that Bitcoin prices are indeed a bubble, and that’s not a newly-formed tenet in his outlook on the cryptocurrency either.
Meanwhile, investors also expect that Bitcoin will continue to fall. This is definitely not good news for investors who put a shiny penny by it. What about the people who actually fell pretty to the fear-of-missing-out pitfall and actually mortgaged their houses to get the extra financial heft for that? It’s easy to blame them as reckless and not prepared to invest, but there’s also the fact that Bitcoin has shown great signs as an asset. At least to some. Headliners have been lambasting it generously.
Keep Going Down
And while some may be divesting, others may be biding their time. If Bitcoin comes low enough, new entrants may appear, snapping up the precious asset at peanuts price and then moving in on the market and hopefully turning a pretty penny. Bitcoin’s pricing is a mystery indeed. We have long given trying to make any forecasts. Documenting its sinuous progress seems a much less demanding task.