Where is Bitcoin Going?
Where is Bitcoin going? That’s the question on many minds as the price stays stagnant, hovering near $240. It wasn’t long ago, a year to be precise, that predictions were calling for Bitcoin to breach $2000. But this Christmas gift wasn’t to be. Instead, Bitcoin as an asset has been in freefall. This has seemed contrary to the growing interest in Bitcoin, both from online users and institutional investors. Investors have poured millions into Bitcoin-related companies, signaling strong interest from savvy and well-connected investors. Legal hurdles have been successfully galloped over, and reputable companies like Coinbase and Circle have enabled broad access for the average person to purchase Bitcoin while maintaining security and meeting KYC/AML requirements. The Bitcoin industry has all the hallmarks of success; a maturing technology poised to upset the status quo of an enormous industry. So why isn’t it?
In business, a common focusing question is asked to help define the trajectory of a product: What problem are we solving? Bitcoin has been around for years now and the answer to that question is still unclear. Early adopters of Bitcoin created buzz by pandering to the online counterculture, citing the ability of Bitcoin to be truly anonymous, something that Big Brother couldn’t touch. This has proven to be a catch-22, as mass adoption of Bitcoin demands regulation, and complete anonymity has proven to be a bridge too far. Still, the potential for micropayments made simple, remittance from any location to any other with far less fees, and financial potential that could return multiples of initial investment if an individual is savvy to buy and sell at the right times have conspired to create an indefatigable faith that Bitcoin is going to be successful. The question not yet answered is exactly how?
Many astute observers have pointed out that investors may actually be interested in the underlying technology, the Blockchain, rather than Bitcoin as an asset. Investors can build a portfolio of companies that possess expertise in the ground floor of a revolutionary technology with potential in fields like medicine, healthcare, information security, defense, finance, and others. This is a natural hedge for institutional money; if Bitcoin takes off as an asset, they win, if the Blockchain proves to be as innovative as promised, they win. Of course if neither avenue pans out, a whole lot of “smart money” will go down the drain. There is significant optimism in Bitcoin as an asset and as a technology. A recent answer on the popular site Quora was featured on Forbes, demonstrating the emphasis Forbes placed on this specific answer. Recently, Deloitte and Coinify announced they are hosting a conference focused on Blockchain payment technology, a clear indication that important companies have taken notice of Bitcoin and the Blockchain, and they are positioning themselves to be industry players in the future.
Bitcoin is far from dead, but also far from meeting early expectations. Though the price is stagnant and big news has slowed down, the energy around both Bitcoin and the Blockchain as disruptive entities continues to propel them both forward. Whether they will continue to share the same path or experience a fork is uncertain, but institutional interest coupled with the ability to provide solutions to many industries means Bitcoin and the Blockchain are here to stay. Where is Bitcoin going? We’ll all have to wait and see.
Image credit: Sirius
I like the steady, level price bitcoin has had for about the last 6 months. I can buy bitcoin and be reasonably sure it’s going to hold it’s value. We can just focus on it being a low fee form of remittance. I think big price moves give bitcoin buyers heart burn. The level price also keeps it from getting undue attention which might help prevent it from being attacked by people in governments and central banks that could do it harm. In the mean time while things are relatively quiet the general public still needs to learn about security for people to become good users, and the system can work on capacity, the upper limit of how many transactions that can be processed.