There’s been a lot of talk over the last few months that Bitcoin is in trouble, the price keeps falling and this ‘fad’ has just about run it’s course…
Generally these commentators are making over-simplified assumptions; lumping Bitcoin, Cryptos and the Blockchain technology together as one, when the reality is, the facts and the outlook for each of them are entirely independent.
Right now Bitcoin is about at the break even point where the market price is very close to the cost of mining it.
So basic economic factors should come into play sometime soon…
The smaller miners who can’t make money at this price point will fold and the more efficient miners will increase their profits… and the price should rebound.
There are definitely some issues with the Bitcoin model, but given that it was ‘the first’, I think that could be enough to push the price back up from this point. How far will depend on many factors… chief among them will be how the community deals with the cost and efficiency issues… but I’m definitely not writing it off just yet!
Bitcoin is ‘open source’ so there’s a large community of loyal coders and developers who are determined to find a way to make it work. And because they’re fans, they aren’t going to give up any time soon.
So if you’re holding Bitcoin, my PERSONAL advice would be to hold onto them for now. The price shouldn’t drop much further, so I’m prepared to sit tight and see what happens next. If you’re not so confident, or you have a large holding, you might want to consider converting some of your holdings into other Cryptos.
There’s so many of these now, I’m not even going to attempt to make any recommendations. Most of the majors are being traded on the currency markets these days, so their prices tend to be a combination of market demand for the individual currency, with a fair ‘bitcoin factor’ built-in.
i.e. Regardless of how solid an individual crypto currency might be, if Bitcoin takes a hit, so does everything else!
So this offers a good opportunity to ‘buy low’ if you’re prepared to do a bit of research, see what support a currency has, and exchange some of your bitcoin into that currency while the price is depressed-by-association.
About the only recommendation I will make is to diversify… Spread your funds across several currencies to minimize your risk.
Rather than just sitting on them though, consider using those funds to purchase a small portfolio of mining contracts. ie. Rather than buy and hold DASH, buy a contract to mine it. If you prefer the look of MONERO check out miners for a contract to mine that instead (or as well!)
If you’ve got a few cryptos starting to accumulate, you can mine a mix different currencies at a couple of different miners, and your returns should be considerably better than any interest rates you’ll get at the bank.
We’ve got a couple of excellent miners in our SrSly portfolio, so if you haven’t already done so, it could be an ideal time to roll a portion of your initial crypto profits into some mining contracts.
Standard disclaimers apply of course… do your own due diligence and only invest what you can afford to lose!
For all the ups and downs of the Cryptos, the underlying technology, ‘the Blockchain’ is here to stay. Any commentator who refers to this as a passing fad or a bubble that’s about to burst simply doesn’t get it!
The Blockchain is game-changing technology that will impact countless aspects of our life, how we communicate, how we do business… and no doubt in other areas we haven’t even considered yet.
One example I saw recently that typifies that is a company looking to use the Blockchain technology in shipping and import/export…
In their example, moving a single shipping container from one country to another generates well over 100 separate documents, all of which have to be signed by multiple interested parties.
It’s a complicated, time-consuming and expensive process, that is repeated over and over, countless times a day, every day of the year.
And yet the same verification and signing process can be completed using the Blockchain in a couple of minutes…
Simpler, infinitely faster and totally free!
Remember this is just one process in one industry… this ‘revolution’ is just getting started!