Many recent news reports have bemoaned the fact that Bitcoin has lost so much value this year. Never mind that Bitcoin traditionally hasn’t done well in the first part of the year, instead gaining value as the year progresses. Pundits focused on short-term performance looked at Bitcoin’s price teetering into the $6000s and saw only a downward progression from there on out. But those who believe in Bitcoin knew better.
Bitcoin’s long-term growth potential will be one of the major drivers of the cryptocurrency, which is why the long-term potential for price appreciation remains so great. Almost as if on cue, Bitcoin responded to its critics by shooting up today to over $8,000.
One of the keys to Bitcoin’s performance this year will be the performance of stock markets. While Bitcoin had seen some amazing growth last year, the performance of the stock market over the past two years has been impressive, too. And with new record highs being reached in January, the stock market began to steal some of Bitcoin’s limelight.
Now that stock markets have come off their highs, many investors are waiting to see whether or not this is just a pause in stock markets’ growth or if it indicates the beginning of the stock market bubble’s bursting. It’s always difficult to pinpoint a market top. Very few people were able to do it in 2007, and very few people will be able to do it today. So they’re waiting and seeing which direction the wind will blow.
If stock markets continue to slide this year, or even if the Dow Jones remains in the 21,000-24,000 point range, expect Bitcoin to pick up additional investor interest. Bitcoin always has the potential for short-term price appreciation, and its long-term potential for price appreciation is unmatched by any conventional financial asset. That makes it a good investment asset for long-term savings vehicles such as a Bitcoin IRA, which is becoming more and more popular with investors. So the next time you hear naysayers claiming that Bitcoin has had its time in the sun, don’t believe it. Bitcoin hasn’t even begun to shine.