After reaching a nearly $20,000 high in GDAX this morning, Bitcoin has retreated to just over $15,000 per coin. As expected, this pullback has triggered the horns of the bubble prophesiers who claim that the new highs in Bitcoin are bound to bring about a healthy correction to cap off the raging gains over the past month. To some extent, this has certainly happened. The drop from almost $20,000 to $15,000 in itself is a very significant correction, but many people are looking for even more. Coindesk released an article will all kinds of eye-catching graphs and data analysis this morning, which suggests that a larger correction in Bitcoin is still on the horizon.
I don’t buy it. As the institutionalization of Bitcoin picks up pace, the price will continue to rise to meet the new demand. New announcements about futures contracts from large financial players such as CBOE and Nasdaq have fueled the recent gains, but they are only the beginning of a much larger trend of Bitcoin and other cryptocurrencies transitioning into mainstream financial tools.
Still, no one can be sure what the price of Bitcoin will do. Without any centralized source of influence or regulation, Bitcoin is worth only as much as the community at large says it is — and we all know how quickly group mentality can change given new information or daily changing circumstances. Depending on who you ask, some people will tell you that Bitcoin is headed to $40k and beyond per coin. Others are not so sure, citing all kinds of fancy math to convince you that it’s headed back down to $5-6k. As far as I can, you might as well take a random walk down a number line until you arrive at a prediction that “feels right.”
The one thing I know for sure is that blockchain technology is only going to become more and more popular in the increasingly digital world. And to the extent that Bitcoin is at the head of this trend and not left behind somewhere along the way, it to will continue to rise in popularity, and therefore price, in the long term.