BTC Resurrection or a New Bubble?

In 2015 the things around Bitcoin, or actually any cryptocurrency, have been very quiet. Unlike the years of 2013 and 2014, when not only Bitcoin rate has been booming, but it the whole blockchain was receiving lots of exposure across different types of media, this year one could hardly hear about bitcoins. This can be easily seen by taking a look at google trends and examining the headlines.

However, the chart of bitcoin topics appearing in the news is not so strongly correlated with the BTC/USD rate itself, let’s take a look at it below.

While BTC was a hot topic in all around 2013, the main results of this news got reflected in the price of this cryptocurrency only by November, when the price of this asset got to the level of 1200 USD per one bitcoin.

However, we can also see that the second wave of news, which was greater than the first one, actually was followed by a decline in the BTC price. If you are familiar with the topic, you will most probably guess that those were the headlines about Mt Gox going bankrupt.

The year 2015 has not really shown any major fluctuations in the BTC/USD price, the chart was mostly flat, ranging from 240 USD to 280 USD per bitcoin.

However, the changes began to happen right when October started, and till today the BTC/USD rate has hit already hit a market of 500 USD. Why did this happen and where will the price of BTC go in 2016? Let’s find out below.

Reasons for bitcoin growth and forecasts for 2016

Unlike the past years, when the main debate about bitcoin value was mostly about it being real or fictional, in 2015 the thoughts have concentrated to decide if BTC is an actual type of a currency or whether it is a commodity. Next, to this, a few BTC related legal cases were actually solved in favor of the blockchain community. Even though these are major positive things to happen, their contribution towards the recent growth is rather fractional.

The main reason for such a hike comes from China as it has started generating a high demand for BTC. Why do Chinese people need the coins though? Due to MMM Global, a well-known Ponzi scheme in Russia and CIS countries.

This tells us that the demand for BTC is rather artificial and will end quite soon. It also tells us that a few bitcoins will be cashed out by the Ponzi scheme participants during the next few months. We can conclude that currently, the bitcoin bubble has started. This means that for some time bitcoin will grow, yet it will eventually slump. How long will it grow is rather unpredictable as well as the upper limit of its growth and the lower limit to which the price can get.

Yet there are three important tips you should note:

• Take your coins out of exchanges, if you have any
• Better avoid any trading when the bubble begins
• Price of BTC can actually go to as low as 0 USD

As making forecasts at BTC is a rather dangerous practice, we are not going to consider its upper limits. The price can literally go up to 10,000 USD per piece, depending on how strong beliefs will be seen in MMM Global. However, once the Ponzi scheme is over, the value should drop to at least the average price of 2015 – 240 USD. Yet we would anticipate a lower price of about 140 USD per BTC once MMM Global has come to its end.

This article is supplied by Nick from Forex Bonus Lab.