The crypto market is extremely volatile and has seen some of the financial world’s most dramatic ups and downs. It was a significant bull run in 2017 when it topped the charts at a whopping $20,000 in December. However, the market couldn’t sustain the price and nosedived in the following year. In fact, the market fell drastically before it ended its six-months long losing streak in February 2019.
Since then, there have been ups and downs in the market, and more or less, the price of BTC has stagnated below the $10,000 mark for over the last few months. There has been a serious and apparent reduction in unbelievable claims by market influencers, who predicted that BTC will touch $1 million in 2020, or that it will cross $100,000 by the end of 2019.
Therefore, there’s a silent question in the investors’ minds, has Bitcoin reached a saturation level? To answer this question, we will have to look at a few important points:
What does Bitcoin truly stand for?
One of the biggest debates that emerged during the crisis of 2018 was whether Bitcoin could be seen as a profitable investment asset or as a sustainable store of value. In simpler terms, the crypto community was in splits about whether users should invest in Bitcoin to make money or use it as a utility token.
Satoshi Nakamoto, the pseudonymous creator of Bitcoin, saw his brainchild as an alternative to the prevailing global monetary system, as he/she wanted to end the immoral influence of the elites in the daily life of common people. However, the following years witnessed a price boom, which compelled investors to bet heavily on the apex cryptocurrency, and when the markets collapsed, the users were drawn back to the basic ethos: Bitcoin was not intended to be an investment asset, and turning it into one will only bring unpleasant outcomes.
How mature has the market become?
Bitcoin was created just over a decade ago, which is why it is the youngest member of the global financial market. In the beginning, the investors in Bitcoin were only those who were connected to the world of information technology. But subsequently, as it became a bit popular, novice investors began investing in BTC without knowing how does it work, and how can they utilize it.
However, things have changed, especially in the last couple of years, as investors are taking an interest in understanding the basic structure of cryptocurrencies before putting their money on Bitcoin or any other cryptocurrency. Moreover, crypto companies are taking extra efforts in educating their customers regarding the functioning of crypto, which has helped a great number of users to gain vital information.
Growing education and awareness about the product are the early signs of a mature market, and therefore, it is safe to assume that the general crypto investor will be matured in the foreseeable future. This doesn’t mean that the market won’t grow; it is just that sudden outbursts will be less frequent.
What are the influencers saying?
Market influencers play a big role in the crypto industry, as investors heavily rely on word of mouth because the market can be a bit too complicated for most to understand. Big guns like computer scientist John McAfee or Tesla chief Elon Musk, who are vocal about their views on the crypto-blockchain industry, have a commanding position in the market.
For instance, McAfee was one of the biggest promoters of Bitcoin and was also among the firsts to predict that BTC will reach $1 million in a couple of years. This led to many of the crypto users follow his statements and approach him for advice. However, the anti-virus pioneer has drastically shifted his stand on Bitcoin in the past couple of months.
There are other influencers, too, like Binance Chief Changpeng Zhao, who stated last month that those who sold BTC below $10,000 must slap themselves, though Bitcoin price has been below the $10K for the past several months. Then there are the likes of Max Keiser, who have been extremely bullish about Bitcoin, and have been predicting a giant rally that hasn’t arrived yet, and doesn’t seem to be arriving anytime soon.
This shows that there are all kinds of influencers in the market; however, their influence on general investors is getting weaker by the day. BTC isn’t falling drastically hanging on to McAfee’s dramatic turnaround, and it is neither skyrocketing based on the Keiser’s predictions. Therefore, this is another indicator that the market is maturing, as it hasn’t fallen for polarizing views at least in that last six to eight months.
How is political influence?
Politics heavily influence every kind of global financial product, and Bitcoin is no different. At first, people thought it to be a gimmick, but gradually, the global leaders took notice. At the moment, crypto trade is being questioned and regulated by governments all over the world, especially in India and China, which has strict policies in place against it.
However, Bitcoin has shown a way to protect the financial rights of a common citizen. In countries like Venezuela and certain African nations, which are going through hyperinflation, Bitcoin helped people survive and protect the value of their wealth. This, on the other hand, has raised questions in the US and its allies on whether Bitcoin can bypass sanctions of countries like Iran, which are at a tussle with the Pentagon.
In 2019, we saw a long list of politicians from the US and elsewhere heavily criticizing Bitcoin, and topping the list was US President Donald Trump, who said he wasn’t a big fan of Bitcoin. Countries like Russia, China, Iran, and Turkey, all of whom are have differences with the United States, are rumored to be working on their national cryptocurrencies, which isn’t a bad sign for Bitcoin.
So, is Bitcoin Approaching a Saturation Level?
The answer, the way it seems at the moment, is no. Bitcoin is not at all saturating but rather maturing. It is becoming the new gold and could become the future store of value. We might not witness a mega bull rally anytime soon, but steady growth in the long run is expected. For those looking to make daddy profits in a baby’s time will have to look somewhere else, as the bubble that “Bitcoin will make you rich overnight” finally seems to be bursting.
Once the market matures completely, Bitcoin will begin behaving like gold, and people, especially from politically unstable countries, will look forward to it as a safe store of value. However, history shows that Bitcoin is prone to unusual twists and turns, though, a rational opinion is to be patient, buy BTC, but to use it or store it for the long run.