Is Bitcoin Dead? 2019 Edition!

By Chase Rimmer / December 18, 2018

In its early years, advocates hailed bitcoin as the currency of the future. After all, it was the first online peer-to-peer payment method to offer complete security and anonymity, requiring no middleman to control transactions. Blockchain technology revolutionized the financial landscape, fundamentally changing the way that companies conduct business in today’s climate.

While Bitcoin has been a game-changer for many, sceptics are concerned about what the future holds for the cryptocurrency. After Bitcoin was first introduced in 2009, its price quickly surged, but since then, its value has been unpredictable. Many early predictions regarding the success of Bitcoin turned out to be optimistic, with the currency’s value never surpassing $20,000 despite estimates that prices would reach $50,000 by the end of 2018.

Plenty of supporters continue to believe that the coming years will see cryptocurrencies rise in value and become more commonplace in the financial sector. With the recent downturn in Bitcoin prices, however, there are also a growing number of people who expect to see the cryptocurrency continue its downward trend. While no one quite knows what the future holds for Bitcoin, looking at past trends can give insight into what Bitcoin holders can expect to see in the coming years.

Previous Downturns

Historically, the price of Bitcoin has been volatile. It’s completely arbitrary, determined by user demand, meaning that Bitcoin will only have value so long as people continue to use it. As fewer people choose to invest in Bitcoin, the buying power diminishes.

Though Bitcoin was first introduced in 2009, it didn’t have a true value until the first transaction took place in 2010. An anonymous user ordered two pizzas for 10,000 Bitcoins, setting off a chain reaction that would lead to the early astronomic rise of the currency. As the idea of decentralized currency began to catch on, other cryptocurrencies also began cropping up, giving Bitcoin some degree of competition. It wasn’t until 2013 that Bitcoin saw its first catastrophic crash, however. Just months after the price reached $1000, it quickly dropped back down to $300 and didn’t recover until two years later in 2015.

In late 2016, Bitcoin was back on the rise, primarily thanks to Chinese citizens snapping up the currency to curb the effects of the Yuan’s devaluation. By the end of 2017, Bitcoin hit its peak value of $20,000 per coin before plummeting once again. Now, the currency is valued at just over $3,300. This recent crash, while not unusual, has many financial experts fearing for the future of Bitcoin. Some believe that the Bitcoin bubble has finally popped and predict that prices will never again reach their peak value.

Companies Using Bitcoin

While most early Bitcoin transactions were between private citizens, as the currency took off, more and more businesses began to accept Bitcoin as a legitimate payment option. Blockchain technology is completely changing the way that major corporations handle their finances, giving consumers a safe, anonymous, and affordable way to purchase products online. These days, you can use Bitcoin to do everything from book a flight to hiring a handyman. There are hundreds of companies that accept Bitcoin, with more being added to the list every day, including popular names such as:

  • Microsoft
  • Subway
  • KFC
  • Dish Network
  • Lionsgate Films
  • Gap
  • Gamestop
  • JCPenney
  • Whole Foods
  • Virgin Galactic

These are just a few of the companies that do business in Bitcoin. Sites such as Etsy also offer private sellers the option of accepting Bitcoin transactions if they so choose. Additionally, there are nonprofits, educational institutions, and political parties that allow donations through Bitcoin.

The Future of Bitcoin

There’s no denying that blockchain technology is revolutionizing the financial sector, from everyday banking to corporate supply chain management. But while it appears that blockchain is here to stay, the same can’t necessarily be said of Bitcoin. There’s no real guarantee that the currency is going to withstand the test of time, or indeed, even be around in the coming years.

Crypto advocates believe that the current downward trend in Bitcoin values is only temporary. In fact, many see today’s low prices as a good thing, buying up coins in masse and waiting for the investment to pay off. They point to the fact that cryptocurrencies offer what traditional banking can’t regarding security and anonymity. Bitcoin is also a decentralized currency that isn’t controlled by the government, making it an attractive option from an investment standpoint.

Unfortunately, although no government controls cryptocurrencies, that doesn’t mean that politicians can’t pass legislation curbing Bitcoin transactions. The U.S. SEC has introduced restrictions and regulations making it more difficult for cryptocurrencies to gain legitimacy, while the Chinese Central Bank is continuing its crackdown on crypto accounts. If Bitcoin does continue to grow as advocates predict, we can likely expect to see more extensive legislation regarding how Bitcoin can be spent and invested.

While there are plenty who believe that the future of Bitcoin is bright, there’s also a significant population that considers the death of Bitcoin as inevitable. Past fluctuations, along with the most recent drop in value, don’t offer a promising future for the cryptocurrency. At this point, Bitcoin is somewhat of a gamble. While it still may be a worthwhile investment, it’s best that people don’t bank their entire financial future on the success of the currency.

There are no guarantees that Bitcoin will ever regain its former glory. Even if it takes a turn and starts to rise in value, it’s likely that prices will continue to fluctuate unpredictably as they have in the past. It’s unlikely that Bitcoin will ever overtake traditional currencies on the financial frontier, but it’s equally as unlikely that it will ever disappear altogether. Cryptocurrencies will likely continue to be a crucial part of the fiscal landscape in the long-term, regardless of what happens to the value of Bitcoin.

Wrap Up

Bitcoin has been a controversial topic since its creation, with advocates hailing it as the currency of the future, while sceptics are convinced that it’s a poor investment. Historically, prices have been volatile, and a recent downward trend hasn’t inspired faith in the currency’s future. However, the important role that blockchain technology has come to play in the financial sector, it’s unlikely that we’ll see cryptocurrencies such as Bitcoin go anywhere soon.

Photo By:
unsplash-logoAndré François McKenzie

About the author

Chase Rimmer

Chase is an expert in finance and uses his expertise and understanding of links between different financial products and life stages to analyze the latest finance news and products. When he's not writing you can find him in first class using his credit card points. Or staying at home with his cat if he's not saved enough yet!

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