The price of Bitcoin has been back around $ 7K for ten days now. Nevertheless, a feeling of extreme fear still dominates in the world of Bitcoin. This article offers you a note of optimism for the coming months with 5 obvious reasons that will encourage a sharp increase in the price of Bitcoin.
It's April 13, 2020, and the price of Bitcoin has been around $ 7K for several days. As of this writing, the price of Bitcoin is $ 6,787. Since its low of $ 3.8K hit on March 13, 2020, Bitcoin has thus recovered almost 85% of its value. (Note: and on April 18, the day of publication, this course is $ 7,100)
Opponents of Bitcoin who claimed that Bitcoin was not a safe haven in times of crisis after its sharp fall in price in the middle of March are silent today. No wonder. It’s always easier to hit an opponent on the ground than it is to face them with real arguments in normal times.
If the feeling in the Bitcoin world is still in extreme fear today, I have a feeling that it will not last very long. As always, nothing is certain with the price of Bitcoin, let alone over a short period of time.
In the medium term, however, it is already becoming more possible to risk predictions about the price trend of Bitcoin. By lending itself to this little game, everything indicates that the price of Bitcoin will increase sharply in the coming months.
The strong bull market expected after its third Halving will take place, and new arguments have now emerged that inspire optimism. In what follows, I suggest you come back to these 5 arguments that will encourage the sharp increase in the price of Bitcoin in the coming months.
1. Bitcoin's third Halving
Much has changed since the start of 2020. The coronavirus has turned into a veritable global pandemic that has shut down the economies of the world's major powers.
- An economic crisis is emerging before our eyes.
It is about the famous economic crisis announced for years by the economists whose coronavirus will have been the trigger. This economic crisis will severely test a monetary and financial system that had not really recovered from the previous crisis of 2008.
To save the system at all costs, the Fed drew nuclear weapons with a quantitative easing program to zero, a reduction in the reserve requirement to zero for banks, but also interest rates set to zero.
Now is the time for an easy money policy that will cause currency devaluation.
We will all be impacted by this devaluation of the American dollar. The poorest before the others as always. The check for $ 1,200 that will be sent to each American is only there to calm down popular revenge for the trillions of dollars printed by the Fed.
Faced with this totally aberrant monetary policy, Bitcoin stays the course. It must be said that Bitcoin's monetary policy is automatic. Everything is written in its source code.
- Whatever happens, the third Bitcoin Halving will take place after the addition of block 630,000 to its Blockchain.
The annual inflation of the creation of new Bitcoins will drop below 2% for the first time in its history. The contrast is stark between a Bitcoin whose supply inflation tends to zero over time and a US dollar whose supply is unlimited as the Fed recently explained.
The shock to the Bitcoin supply that this third Halving will constitute will be even stronger in a world where the scarcity of money no longer exists.
essential difference which will push them to go to Bitcoin in order to take advantage of its monetary policy.
Demand for Bitcoin will therefore increase sharply in the coming months, which will influence its price upwards. As such, I am convinced that the third Bitcoin Halving, expected in just under 30 days now, has not yet integrated into its current price.
2. The adoption of Bitcoin
In the coming weeks and months, the adoption of Bitcoin will be boosted. The Halving of Bitcoin will obviously be the first big reason in the sharp increase in the adoption of Bitcoin.
The Halving will make a lot of noise, and more and more users will be tempted to come and discover Bitcoin so as not to miss the revolution in progress.
This rising demand for Bitcoin will increase its price, which will attract even more people.
A kind of virtuous circle will form which will boost the price of Bitcoin. Bitcoiners have understood that the race to own 1 Bitcoin had indeed started since the beginning of the year 2020.
It is no coincidence that the number of addresses that have at least 1 Bitcoin has exceeded 800K by the end of this month of March 2020:
Bitcoiners took the opportunity of a Bitcoin around $ 4K to strengthen their positions and HODL even more Bitcoins in the long term. The strong and rapid rebound observed following the drop in the price of Bitcoin to $ 3.8K is proof of this.
The adoption of Bitcoin in the coming months will also be reinforced by the decisions currently being made by the Fed and other central banks. Aiming to save the current monetary and financial system at all costs, these decisions will negatively affect what people own.
The currency devaluation expected in the coming weeks will bring down the purchasing power of hundreds of millions of people around the world.
All these people will once again be disappointed by a fiat system which no longer protects them.
Everyone disappointed with the fiat system is a potential future user of Bitcoin. This suggests to me that the number of Bitcoin users will necessarily increase in this way in the coming months.
3. A FOMO feeling
FOMO (Fear of Missing Out) sentiment is well known to investors. It develops when the price of an asset rises sharply. Everyone wants to buy it.
I often repeat that it is a fundamental mistake to make investments by letting your emotions take precedence over your sense of logical reasoning. It's totally true. Unfortunately, millions of people still haven't understood this.
A minority of people apply Warren Buffett's adage to the letter:
“Be afraid when others are greedy, and be greedy when others are fearful.”
Warren Buffett
If you think I’m exaggerating, you only have to see the behavior of a majority of people when Bitcoin fell sharply to reach $ 3.8K on March 13, 2020.
Many have started to panic selling all their Bitcoins to recover as much cash as possible. They gave in to the opposite feeling: the FUD (Fear, uncertainty and doubt) feeling.
However, it was almost a sales period as I explained at the time.
However, without a complete belief in Bitcoin and its revolution, it was not possible for these people to hold their positions. So they ended up capitulating and losing a lot of money.
When the price of Bitcoin rises again sharply in the coming months, they will return to Bitcoin, still letting their emotions take over.
The FOMO sentiment will strongly accelerate the demand for Bitcoin which will once again boost its price in the coming months.
Despite repeated warnings all the time, the same people will still make the same mistakes and continue to let their emotions take over.
For Bitcoiners who HODL their Bitcoins for the long term, all this will only be the confirmation that you have to play long term with Bitcoin to be really winning.
4. The economic crisis
The economic crisis that is starting promises to be even harder than that of 2008. The current system has not really recovered from the previous crisis. The financial markets had been artificially inflated by the easy money policies of the central banks as well as the massive share buybacks carried out by many large companies.
The fragility of all of these companies is exposed today when the economic crisis begins.
Most of them come to their governments to ask for bailouts.
Governments will probably have to give in or risk adding fuel to the fire of the emerging job crisis. By refusing to bail out a company that employs hundreds of thousands of employees, governments would be at enormous risk.
In short, the abusive behavior of the directors of these companies will go unpunished. They have inflated the share prices of their companies instead of keeping cash in the event of a hard blow like the one we know, and today it will be up to others to pay for their actions.
As always, those who will foot the bill are citizens like you and me.
In the United States, the government has decided to send a check for $ 1,200 to each citizen in order to calm a possible public outcry that would increase in the country.
Unfortunately, such a check will not make much difference to the plight of millions of poor people.
Also, you shouldn't be wrong. This sum of $ 1,200 is primarily intended to support American consumption since the authorities expect citizens to spend this money on consumption.
I have a feeling that we cannot measure the future effects of this economic crisis. We are not at the end of our nasty surprises, and confidence in the current system will continue to erode.
The reserves of gold and Bitcoin will significantly benefit from this economic crisis.
Regarding Bitcoin, the increase in demand to be expected will come at the same time as its third Halving expected in May 2020. The effects will be increased tenfold which will have the same effect on its price in the coming months.
5. Geopolitical conflicts
The coronavirus crisis we are experiencing once again highlights the rivalry between the United States and China for leadership as the world's leading power. The coronavirus started in China, and today, China looks like a country that has conquered this disease.
Many denounce a communication strategy on the part of China which would seek to minimize the real situation on its territory.
Whether this is true or not, China today gives the feeling of being in control by coming to the aid of many countries around the world. The country sends masks or even fans to those who request it, which strengthens its position.
Meanwhile, Donald Trump's United States is struggling to deal with this situation and is withdrawing.
At the end of this coronavirus crisis, I think it is very likely that strong tensions will again arise between the United States and China. The trade war that seemed to have to end in 2020 could start again.
Geopolitical conflicts could resume again after the end of the coronavirus.
The current attitude of North Korea, which continues to fire missiles in the Sea of Japan, as the world faces a dramatic pandemic, is also appalling.
I am not even talking about the situation between Iran and the United States which is still not resolved. It is simply muted following this pandemic.
All of these geopolitical conflicts will add uncertainty to an already more than uncertain world.
Faced with uncertainty, you know as well as I do that the safe haven values are boosted. Bitcoin, which is indeed a safe haven in times of crisis, some people may not, will benefit from this uncertain global situation.
- Conclusion
Bitcoin experienced an extremely difficult month of March 2020. However, these fundamentals have not changed since this month. In addition, the situation was identical for all liquid markets during this period.
To tell the truth, taking a step back, you will be able to observe the bigger picture concerning Bitcoin. Thus, you will find that Bitcoin has been doing very well for a year, while the Dow Jones and the S&P 500 are losing more than 10%.
Bitcoin is doing very well in this difficult situation where everyone has panicked.
The third Halving to come in less than 30 days, as well as the economic crisis that we are going to experience, are two of the main arguments that I have just explained to you which make me be extremely optimistic for the price of Bitcoin in the coming months.
In order to be able to really benefit from it, you must now seek to educate yourself on Bitcoin. You can make a real decision then by leaving your comfort zone of fiat money to try to reach the growth zone that is Bitcoin.
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