I don’t like dwelling on the price of Bitcoin, whichever way it finds its fancy. There are more important projects that, in the longer term, would determine the success of Bitcoin. However, since there has been quite a ‘panic’ in the markets, here are my thoughts on this:
- We’ve been here before. No two bubbles/busts are the same, but seriously, this shouldn’t be news to anyone that Bitcoin can have wild swings. And by wild, I mean the kind of volatility that the stock market has in a year, we see that in the Bitcoin markets in a day.
- Almost half a billion dollars has been invested in Bitcoin startups by venture capitalists. That means, the combined valuation of all Bitcoin startups is close to 3-4 billion dollars, conservatively (based on ~10% equity in a seed round – I understand valuation is far more complex) or about the market capitalization of Bitcoin right now. If push comes to shove, they will need to hold up their business and therefore need to support the price, to some extent at least.
- Bitcoin ecosystem has never been at a stronger position than it is today, from adoption, perception and regulatory points of view.
- Bitcoin isn’t going anywhere.
In short, stop panicking. Also, there’s nothing to see here. It’s a replay of a movie we’ve seen several times in the past. As they say, history doesn’t repeat but it rhymes. That’s my two cents on the recent Bitcoin price events.
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