Bitcoin has more or less had three booms or bullish trends as they are also known as.
- The first one was in 2013 when Bitcoin rose from being worth $2 to $1000. This is when Bitcoin and cryptocurrencies first went mainstream. Mainstream media reported on Bitcoin heavily, this meant that bitcoin and cryptocurrencies were thrusted into the public sphere. By the end of 2013, bitcoin was known throughout the world.
- The second one was in 2014 after Bitcoin had suffered a big crash after previously being worth $1000. The price rose back to around $1000 in 2016.
- The final Bitcoin boom to date came in December 2017 when the price of a single Bitcoin reached an all-time high of $17,900. This price had people dreaming of a world where Bitcoin was the main currency of the world.
Post 2012, the whole world began to take notice of bitcoin. This brave new world of online currency marked a shift in how the world was seen – no longer did banks and governments seemingly have total control over the system of money and capital. Bitcoin became known as the anonymous currency which could break us free of our paper money chains, or so we thought.
Indeed, whilst the price of Bitcoin in 2013 and beyond continued to increase, many mainstream companies, including PayPal and Microsoft, upon seeing how popular Bitcoin had become, allowed their customers to make transactions through the use of Bitcoin. Retailers, especially, began to implement ways in which customers could make purchases using bitcoin due to the ever growing popularity of the currency. Likewise, a variety of other industries began to implement payment via bitcoin in order to attract customers.
Some of these industries included the aforementioned retail industry but also travel and hotel agencies. Dating sites such as OKCupid also allowed their users to pay for services using bitcoin. The iGaming industry also looked to take advantage of the popularity of bitcoin by creating bitcoin casinos – online casinos where players can deposit and gamble using their bitcoin. For obvious reasons, gamblers are drawn to the anonymity of bitcoin. This is one of the reasons why casino comparison websites such as CasinoGuide are popular amongst bitcoin gamblers – these comparison websites rate and review the best casinos for those wanting to play with their bitcoins. A number of mobile gaming apps and games too made it possible for gamers to buy in-game items using bitcoin.
However, since the major bitcoin boom of December 2017, the hype surrounding the coin has died down, quite substantially.
The decline in bitcoin
From January 2009 to the present day, the price of bitcoin compared to the US dollar has truly been a roller coaster ride. As of November 2018, the price is at $3,778 per bitcoin. A decline of almost $5000 since November 2017 and over $14,000 since December 2017. Although there is no specific reason for the decline, there is numerous smaller inclinations as to why bitcoin could not carry on to become the currency that its investors and supporters wanted it to be.
Undoubtedly, the main appeal of bitcoin to its users was the anonymity of the currency. In the early days of the cryptocurrency, bitcoin was the primary currency of the dark web. Users would pay for illegal items such as drugs by using bitcoin – bitcoin does not leave a paper trail like credit cards do. However, in 2018, South Korea brought in a regulation that required all bitcoin traders to reveal their identity – this was essentially a ban on anonymous trading of bitcoins.
A variety of other regulations around the world meant that it looked increasingly likely that making payments using bitcoin would not stay anonymous for long.
Two other big reasons why bitcoin may have declined in popularity is because of the high transaction fees involved when using the cryptocurrency as well as the length of time that transactions take. Transaction times in regards to bitcoin are notoriously slow whilst transactions fees are notoriously high. Unsurprisingly, users preferred to pay using other methods that are quicker and do not charge as much. With the ever increasing prospect of zero anonymity along with the aforementioned transactions fees and times, it becomes increasingly clear as to why the price and popularity of bitcoin has declined so sharply throughout 2018.
Will Bitcoin be able to bounce back?
Bitcoin has always been unpredictable and it is doubtful that that will change. However, it is becoming increasingly unlikely that bitcoin will become the all saving, recession proof currency that it was once thought as.
The technology used in bitcoin is old in comparison to other albeit newer cryptocurrencies. Many of these newer cryptocurrencies have quicker transaction speeds and are free to use. In addition, one of the biggest appeals of bitcoin was the fact that purchasing something using bitcoin would make your purchase anonymous, the fact that this is not always the case now ensures that a lot of users have looked elsewhere for a currency that will offer them anonymity.
One other factor that may have factored into the decline of bitcoin has been the fact that lots of bitcoin holders are simply traders, investors and speculators. In order for bitcoin to rival the fiat system of currency then it was vital that it became a currency widely used for purchasing goods and services. Unfortunately, many of the people that horded the currency did so only as a way to help raise the price so they could sell the currency at a later time.
It is likely that a cryptocurrency of the future will improve upon bitcoin but whether it is something that will replace our current system of fiat currency is another thing altogether. There are already dozens if not hundreds of other cryptocurrencies that can be used today and looking into the future, every increase in technology will likely mean that the cryptocurrencies of the future will become better and better.