If you’re aware of the remarkable benefits offered by Bitcoin, you’re probably a Bitcoin enthusiast. And if you are a Bitcoin enthusiast, you’re probably sick of hearing that Bitcoin is “dead.”
To paraphrase Mark Twain, “The rumors of Bitcoin’s death have been greatly exaggerated.”
Bitcoin is certainly not dead, and if you had a Bitcoin for every time the mainstream financial press had declared it so, you’d be a very, very wealthy person.
At least one global financial journal is, rather than declaring Bitcoin dead, singing its praises and predicting that the price of Bitcoin will soon surge to new all time highs (a viewed shared by us as well).
International Business Times reports,
Bitcoin has been pronounced dead almost 100 times by news outlet after news outlet. Year after year, we find articles from notable news outlets such as The Washington Post, The Guardian, Forbes, and even a former bitcoin developer concluding that bitcoin is dead and that it is time to move on. Yet it’s still here.
We, at XBT Provider, believe that the price of bitcoin is suppressed and that we are soon going to see an upward correction in the price that could break the previous highs of over $1,000 per bitcoin. We do not share the general view in mainstream media that bitcoin is soon forgotten, but instead, we believe that it will be an integral part of our financial lives, just like the internet is today.
Permissioned blockchains will not outcompete bitcoin
Open platforms, like bitcoin or the internet are all heavily dependent on network effects to gain traction. As an example, we can compare the development of the open internet in comparison to closed company versions of it.
While the internet was not the only protocol being developed for sending information, it won over similar centralized solutions because of its open characteristics which in the end led to faster innovation.
We believe that bitcoin is at a similar stage as the internet in the 1990s. We are seeing multiple centralized blockchain solutions being developed by companies, similar to what was promised about the internet. However, looking at the internet as a roadmap of what will come, we have a firm belief that bitcoin will become the dominating blockchain for the transfer of value in the not too distant future.
Bitcoin will remain the dominant cryptocurrency
The Bitcoin blockchain is not the only blockchain, and there are many blockchains in which people see potential. Hundreds of different blockchains have been developed, and hundreds have died due to lack of demand.
Some, like Ethereum, promises more bells and whistles than the Bitcoin blockchain, but to date, the Bitcoin blockchain has the highest number of users, the highest amount of investment in its ecosystem and the highest amount of resources securing its network by orders of magnitude.
Network effects are hard to get but even harder to overcome by competitors once they are starting to take form. We believe that if adoption of blockchain technology happens further, it will mainly happen by the adoption of the bitcoin blockchain while other blockchains might become niche use-cases at best.
Chinese currency will devalue further
The Chinese Renminbi (also known as Yuan) have been devalued in the last months, as a consequence of inadequate performance from the Chinese economy. This has led to many investors taking bets against the Chinese Yuan expecting the People’s Bank of China to be forced to devalue their currency against the USD further. If current trends continue, we expect to see a positive effect on the bitcoin price since bitcoin, and the Yuan is negatively correlated.
On top of this, China is seeing more and more capital fleeing China in anticipation of further Yuan devaluation. More and more Chinese investors are moving their assets out of the country as fast as they are allowed, and often in ways that are illegal, to make sure that they retain their wealth.
Since bitcoin’s primary function is as a store of value and as a value transfer network that functions outside of any regulatory framework, we can anticipate a surge in their demand from Chinese investors if capital controls increase further.
We couldn’t agree more. Our price target for Bitcoin in U.S. Dollars for 2016 remains at $2,000.
That’s far from dead.
>> Read the entire article at ibtimes.co.uk