Is Bitcoin Going to Die in 2018?

Since the beginning of August, the Bitcoin price has started to fall sharply, causing high panic among cryprofans. Some of them even worried that if bitcoin will collapse oneday? My answer is absolutly No! Why?

 

First, It is not uncommon that bitcoin price goes ups and downs greatly, and the most important is that people’s demand for bitcoin cryptocurrency detemines it’s value and whether it will become bleak.

 

Data on August 12th shows that Bitcoin’s share of global digital currency market capitalization has risen to 50.2%, setting a new high this year. It indicates that the overall market value of digital currency has shrunk seriously with the decline of the altcoin currency firstly; And secondly, due to the anti-fall characteristics, Bitcoin has become the best safe-haven option for the bear market, therefore, the demand for bitcoin is rising, and the bitcoin market is great.

 

1. Bitcoin = Thesafe haven for inflation

A recent research report shows that bitcoin is a safe haven in times of crisis, especially in countries with high inflation, Bitcoin is the first choice for people to avoid the impact of inflation. Let’s explain it with an example:

 

On August 10th, as Trump announced in Twitter that it would levy double steel and aluminum tariffs on Turkey, Turkey’s digital currency exchanges surged in trading volume, reaching 100% in 24 hours. While the Lira (Turkish currency) fell by nearly 17%. Seeing the money in hand is getting less and less valuable, local residents set off a wave of buying bitcoin. And due to the low local electricity bill, many people began to rely on mining to maintain their lives.

 

In addition to Turkey, there are people in some other countries who also view bitcoin as the safe haven to resist inflation. For example, Venezuela, which was once very prosperous. In recent years, inflation in Venezuela is very serious. The depreciation of the fiat currency is over 99.9%. A cup of coffee was only 8,000 Bolivars a year ago. Now it takes 2 million to get a cup, and the salary of a local university teacher is only around 5.9 million Bolivar.

 

Such a serious inflation has led to the frenzied purchase of bitcoin by Venezuela. Now the price of buying bitcoin with the fiat currency is almost doubled every three weeks, and the bitcoin trading volume is even higher.

 

2. The crash of the economy=the opportunity for bitcoin

Iran is also a country that all the people are enthusiastic about bitcoin. In order to escape Trump’s economic sanctions, Iranians have taken more than 2.5 billion dollars to buy bitcoin. Similarly, many countries in Africa regard bitcoin as a straw. “I replaced all my savings with Bitcoin, which is the only way I can protect my assets.”

 

Some people may say that bitcoin can not be compared with fiat coin as bitcoin price fluctuates so much. However, in fact, for countries with long-term high inflation, Bitcoin is much more likely to appreciate. We can see from the above exmples that once the currency is seriously depreciated, people will naturally find ways to circumvent the shrinking of assets. Historically, the  US debt crisis in 2011, the Cyprus crisis in 2013, and the shutdown crisis in 2013, Bitcoin have shown that it is another strong safe-haven option.

 

In summary, although bitcoin prices have fallen sharply, I believe it will not collapse. It has a certain role and value in the economic system, and will never disappear like a bubble in a short period of time.