The price of Bitcoin has seen a drop recently. This proves that it is time to embrace a more mature culture to build, grow and adopt bitcoin. The fact that its price does not matter differentiates it from other cryptocurrencies. The price of bitcoin has recently fallen, but what matters over the long term is its value proposition. Traders and speculators are losing interest. They continue to flock to new projects such as decentralized finance (DeFi) or non-fungible tokens (NFT). This disinterest is considered a negative evolution of Bitcoin for some but very positive for others.
Bitcoin and its “bear market”
The fall in the price of bitcoin is justified by some as being the absence of its real functional utility. Since the creation of bitcoin, some analysts describe it as a Ponzi scheme. Indeed, it depends on continuous artificial speculation within the cryptocurrency market. As speculators are attracted to all that glitters, they lose interest in Bitcoin in times of “ bear market “.
However, bitcoin is still trading at a much higher level from its 2020 and 2021 lows. Its adoption, which is increasing at the institutional level, represents real value. The money printing carried out by the Federal Reserve as well as the negative real interest rates caused the inflow to the stock markets to end. Bitcoin and other altcoins are also affected. It will only be after this chaos has dissipated that we will see which assets, projects and actions really offer objective and tangible value.
Given the current downturn in the overall market, traders need to rethink what a ” good investment “. An investment, by definition, should be based on long-term confidence in the value of an asset and not on short-term growth projections. For the case of bitcoin price, it increases by 331% compared to January 2020. The performance of the S&P 500 is far behind. It also beats total retail profit. Bitcoin also outperforms all other assets despite falling by half from its all-time high.
A weak time preference culture currently prevails in the Bitcoin community. The term weak means over the long term. It fundamentally opposes Ponzi-minded speculators who need quick wins all the time. This 331% is more than enough for Holders who bought before the frenzy of the past two years.
The fundamental value of bitcoin will not cease to be real in the future for those who know how to wait. Its detractors have blamed Bitcoin for needing meme-stock speculators to function. After the disappearance of the latter, they deplore the absence of these speculators. This proves that Bitcoin is not a Ponzi scheme. The honesty of its current price attests to the honesty of its fundamental value proposition.
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Interested in investment and financial markets after a business school in Chambéry, the passion for cryptocurrencies was obvious. The blockchain is surely the universal tool of tomorrow.