The White House discussing bitcoin. The Big Bang Theory discussing bitcoin. Katy Perry and Warren Buffet discussing bitcoin. Bitcoin web searches exceeding those for Donald Trump. There’s no such thing as a quiet week in bitcoin, but even by its usual agitated standards, this one’s been noisy. Celebrity hangers-on come and go and generic sitcoms move on, but bitcoin refuses to let up. By all reckoning, this is just the tip of the iceberg. But what if we’re all wrong? What if it turns out that this is as good as it gets?
Just the Tip
Everyone’s got a favorite bitcoin chart. It doesn’t matter what data it displays – trading volume; dollar price; transactions; wallet addresses – because the key takeaway is always the same: this is only the beginning. This is just a fraction of the growth we’ll see once the normies pile in. This is just the tip. Just hold, we’re told, and by this time next year we’ll be sitting pretty. Five years from now and we’ll all be driving whichever meme car happens to be de rigueur among crypto’s nouveau rich.
In the interests of playing devil’s advocate, however, let’s consider the alternative. There’s a case for saying that 2017 will go down as the year we hit Peak Bitcoin, followed by a gradual decline as the world lost interest, the proles returning to their mind-numbing TV shows, the White House focusing on its latest bête noire and investors fixating on the latest asset class to promise sick profits. We’ll inspect that side of the coin in a moment, but first, let’s hear the case for bitcoin.
The Age of Bitcoin is Just Beginning
Since everyone’s got a favorite chart, let’s scrutinize a selection that shows bitcoin’s incredible growth and huge potential. Highly respected crypto assets author Chris Burniske produced the following chart which suggests we’re at the frenzy phase of cryptocurrency. If you thought the last few weeks were wild, you ain’t seen nothing.
Then there’s the following effort from Blockchair which shows the number of bitcoin addresses that are loaded with satoshis. Like most bitcoin-related charts from 2017, this one is exponential.
If the last couple of graphs weren’t exponential enough for you, try this one for size. The Wall Street Journal compared bitcoin’s stellar ascent to every other modern asset class and came up wanting. Nothing like this has ever been seen before, and may never be seen again in our lifetime. Bitcoin in 2017 is so steep it’s almost vertical.
Bitcoin is literally off the charts. This raw data is bolstered by the quotes of investors, analysts, and experts who all see bitcoin going parabolic. “Over the next 10 years the cryptocurrency market will explode… I actually believe that nations will begin issuing digital currencies,” said Chris Concannon on Wednesday.
The Counter-Argument: Peak Bitcoin is Already Here
But enough of the bitcoin back-slapping – it’s time to play devil’s advocate. Imagine, for a moment, that 2018 were to unfold as follows:
January: Futures trading rolls out, but proving the maxim “buy on the rumor, sell on the news”, an overbought bitcoin market slumps to $8,000 and a bear phase sets in.
February: Following months of speculation over its balance sheet, Bitfinex/Tether collapses, taking over a billion dollars in customer funds with it.
March: A successful terror attack on American soil, funded from the Middle East using bitcoin, prompts President Trump to issue a crackdown on cryptocurrencies.
There’s more, but you get the gist. Okay, so even the most bullish of bitcoiners isn’t pretending there won’t be obstacles in the road or temporary setbacks. But here’s the thing: none of those nightmarish scenarios could play out and bitcoin could still slump. The wall-to-wall media coverage can’t last forever. The exponential growth can’t last forever. And the sitcom appearances and celebrity endorsements certainly can’t last forever. What happens when the hype fades and the circus packs up and leaves town?
There’s just one chart that needs produced to argue the bear case for bitcoin:
Yep, it’s that one again. What if, rather than the “media attention” phase, we’re actually at the “new paradigm” stage? If so, 2018 promises to be no less enthralling, even if it’s for all the wrong reasons.
Focusing on the price of bitcoin, while headline-grabbing, misses the bigger picture. To the virtual currency’s true believers, it doesn’t matter whether bitcoin goes up, down, or sideways next year. What matters is that the cat is out of the bag.
Cryptocurrency, as a store of value, a means of purchase, a form of remittance, and anything else one may care to use it for, has been normalized. Whether we’re driving Lambos or Ladas 12 months from now doesn’t matter. The days of government-issued fiat currency – or “snail paper” as Erik Vorhees recently called it – are numbered. Bear or bull, bottom or top of the curve, bitcoin is here to stay.
How do you think bitcoin will fare in 2018 and what obstacles could you see derailing its ascent? Let us know in the comments section below.
Images courtesy of Shutterstock, Wall Street Journal, Blockchair, and Chris Burnsiske.
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The post Meme Chart Mania: Is This the Tip of the Iceberg or Have We Already Hit Peak Bitcoin? appeared first on Bitcoin News.
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Author: Kai Sedgwick