Is the 2018 Bitcoin bear market like the one in 2014?
By: Bitcoin Compass
Tags: Crypto, Blockchain, Cryptocurrency, Cryptocurrency Investment, Bitcoin

When comparing them, we should consider two things — fundamentals and technical analysis.

Let’s start with the fundamentals. For that, we need to look back at the year 2013.

Few people realise but in 2013 we saw 2 bubbles burst, one in April and the other one that started in December. Let’s look at the second one, though, as it was what can be called ‘the longest winter ever seen in Cryptoland.’ Many people are scared that this 2018 winter will be as long as the one in 2013, but hold on, let’s look at the facts.

In November that year, we saw an almost 6x increase in the price of Bitcoin, from $200 to $1,150 (does this not look similar to what we saw in late 2017?). Many believe that the “pump” was due to the “Willy” bot that was operated by Mt. Gox.

What normally follows after such an increase is a correction of course. And that’s precisely what happened. The Bitcoin price had dropped to $300 by October 2014.

But what triggered this correction?

To start with, the Chinese government outlawed the use of cryptocurrencies by financial institutions right before the price reached its peak. Shortly after, on the 7th of February, Mt. Gox got hacked and lost over 700,000 BTC.

It was an explosion. Keep in mind that Mt. Gox wasn’t a small exchange. Over 60% of the global BTC transactions came through it. The impact of this is hard to overestimate.

This, combined with the imminent correction, led to the snowball effect, which caused a 36-month long price downfall. Not many positive news were flying around back then. Cryptocurrencies were far from mainstream. No ICOs were valued at $3 billion. Not many exchanges were operational. These were the dark days for blockchain and many people, quite naturally, lost their faith and sold their bitcoins.

Now, return to the present.

Pause for a minute and ask yourself, ‘Do I really believe in the future of Bitcoin, blockchain and smart contracts?’ If the answer is no or you’re hesitating, then you may want to think about selling your coins and investing in something “safer” like government bonds. If you do believe, manage your portfolio, avoid stupid reckless moves, and watch your portfolio grow with exuberance.

You choose… to believe or not to believe…

A report from McKinsey & Company says smart contracts can save businesses more than $50 billion in business-to-business transactions.

The respected research firm Gartner Group projects that 25% of global organisations will use smart contracts by 2022.

A report from Deloitte suggests that smart contracts can save the mortgage, investment banking, and insurance industries as much as $39 billion every year.

According to Forbes, credit card fraud costs U.S. merchants an estimated $190 billion per year. Smart contracts tied to individuals on the blockchain could virtually eliminate such fraud.

Keep in mind, this doesn’t mean that all the “sh*tcoins” will appreciate wildly in the coming months. Many, without a doubt, will die out. Many companies will implement their own blockchain/smart contracts solutions. There is a misunderstanding between some people thinking that when Banks implement their own blockchain/smart contracts solutions will drive the price of a certain coin up. Which is false. However, it will definitely show that blockchain/smart contracts have value. That’s why you should constantly keep an eye on your portfolio. Be sure that you invest in projects that are constantly developing and are here to stay.

Eventually the price correction will stop and we will start going up. To help you see the big picture, remember Bitcoin’s price in 2014 corrected as much as 85%, down to $160. Within the next 3 years, however, it increased 11,700%, up to $20,000 in December, 2017. In 2018, we’ve seen 70% correction so far. It’s very likely to dip down even more, as it’s clear that both bear markets (2014 and 2017) are following very similar patterns.

Therefore, let’s make some rough calculations. And these are not predictions.

Let’s say we eventually reach $3K per Bitcoin this year, thus, finishing a 85% correction, just as we did back in 2014. At this point, we’ll be sitting at around 120B market cap. If, theoretically, this is the end of the bear market and we see a reversal, we may be up for at least 10,000% price increase for Bitcoin within 3 to 5 years. This means, Bitcoin’s price can reach up to $350,000 per Bitcoin by the end of 2023. At this point, the market cap will be sitting at around 15 trillion dollars. It’s worth mentioning that the current total capitalisation of the stock market is about $80 trillion dollars.

No one knows exactly when and at what price we will hit the bottom. That’s why we are monitoring the BTC movement 24/7. Because we have to not only save our capital but also increase it. Once the downtrend is over and we have accumulated enough BTC, the Bull Run will be fabulous!

Keep an eye on our channel, we will publish a post on comparing the Technical Indicators between the two bear markets.

In the constantly and rapidly changing world of blockchain, it can be a struggle to stay ahead of the game. Follow Bitcoin Compass on Telegram (t.me/bitcoincompassofficial) for cryptocurrency trading and investing signals, Bitcoin updates, blockchain content, and more.