Tuur Demeester: Bitcoin will not Set New Records this Year
Though Bitcoin already reached the bottom, it does not mean that the cryptocurrency will set a new historical maximum this year, – says trader and economist Tuur Demeester in his blog on Medium. The expert thinks that the market needs more time to process the 36-month rally when the Bitcoin price raised from $250 to $20,000 in December 2017.
In his opinion, 2018 will be memorized as a period of difficult growth – when unconfident investors got rid of their savings, regulators tried to keep up with growth and infrastructure continued to develop. Demeester predicates conclusions upon several factors. Among them – growing competition among miners despite decreasing price of Bitcoin. In the estimation, profitability of Bitcoin mining decreased by 90% leading to the significant pressure on the market.
While miners keep pressing on the market, both individual and institutional investors will not be able to provide customer endorsement enough to set new price records in the nearest future. In accordance with the recent survey by Gallup/Wells Fargo, less than 0.5% of the US investors plan to purchase BTC in the nearest future, and the data by Google Trends indicates that the number of Bitcoin-related search queries decreased in comparison with the previous year.
Demeester notes that growing interest to Bitcoin mainly comes from the trading companies. Thereat companies focused on long-term investments (pension and mutual funds) stay away from the cryptocurrency ecosystem. Technical prospects of Bitcoin do not encourage optimism as well. In Demeester’s opinion, both network value against user activity and value against transactions indicate that Bitcoin is overestimated as for its current level of utilization.
Resulting from review of all factors, Demeester concludes that in 2018 the price of Bitcoin will continue fluctuating in a best-case scenario, and will drop in a worst-case scenario before its continues to rise in 2018.
Charts by Google Trends and Coinmarketcap.com