In 2017, Bitcoin had its most successful period, reaching its all-time high of $20,000 in December. But the following year was absolutely horrific for the entire crypto space, and till February 2019, Bitcoin had crumbled down to just over $3,000.
During the downfall, cryptocurrencies were heavily criticized by traditional giants like Warren Buffett, who called Bitcoin ‘rat poison squared’. It seemed that the sector would die and that the bubble has finally burst. However, it wasn’t to be, and since February, the market has shown a tremendous turnaround. And this time, the growth feels quite different from what it felt in 2017. Here’s why:
Mature Market Investors
In 2017, Bitcoin was more of a sudden rally, and many retail investors entered the space due to a bandwagon effect. However, times have changed in 2019, and the investors backing Bitcoin have a better understanding of the crypto space, which will make them hold their investments even if the market shows signs of falling. This was evident in the recent price drop of over $1,400 in a day.
After closing near $13,000 apiece on June 26, Bitcoin fell to late $10,000 within a few hours. However, this did not create any panic in the market, and the price is back to over $12,200. This shows maturity, and that the investors are willing to HODL.
Bitcoin Better Equipped Than Ever
During the last year, when the markets were sliding down, the dedicated community kept working on the blockchain to make it more accessible, usable, affordable, and less time-consuming. Most developers took major steps towards crypto adoption, and newer developers joined the blockchain.
Resultantly, there was a significant improvement in terms of adoption and time consumption. Since January this year, Bitcoin blockchain has consistently been able to execute 7 transactions every two seconds, which is phenomenal by any standards. Though similar speed was achieved in 2017 too, it was only for a brief moment then, and in 2019, it has been, more or less, consistent.
Crypto Adoption By Institutional Investors
In the last couple of years, the potential of cryptocurrencies has been very well recognized by institutional investors. Right from the New York Stock Exchange, to Fidelity Investments LLC, VISA to PayPal, and Apple to IBM, every major corporation is now engaged with cryptocurrencies in some or the other way. The involvement of such big institutions brings much-needed credibility in the crypto space, which results in better market sentiments.
The latest to enter the mainstream crypto game is social media giant Facebook, who unveiled its Libra cryptocurrency on June 18. Given the massive user base, it is expected to open the doors of crypto on hundreds on millions of new users. This translates into more and more people becoming aware of Bitcoin, and hence engaging in trade.