What Will Happen to the Bitcoin Price in 2018?

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What is Bitcoin?

 

What’s in Store for the Bitcoin Price in 2018?

 

2017 has seen a wild ride in the price of cryptocurrencies. The price of Bitcoin has risen close to 2000% since the start of 2017. When price rises like this are seen it’s inevitable that Bitcoin’s critics talk of a bubble.

 

You don’t have to read too far before you see the Bitcoin rise mentioned in the same sentence as that of the Dot-com internet boom and bust or even the Dutch tulip craze. If you’re interested in general reading about bubbles and the psychology of crowds read Extraordinary Popular Delusions and The Madness of Crowds or The Crowd both are classics and in my humble opinion essential reading for any investor. 

Growing Awareness 

 

While the price has seen a level a volatility which would test even the most stoic, what is more significant is the continued awareness of Bitcoins. More and more companies now accept payment by Bitcoins including Microsoft (for the purchase of games, movies and apps) and the travel company Expedia.

 

With this growing awareness are companies who are looking to leverage as far at they can on the publicity. Recently, a drinks company in the US changed it’s name from Long Island Iced Tea Company to Long Blockchain Corp. While the connection between iced tea and blockchain might be a stretch of the imagination, the company’s stock price rose 5 fold on the announcement

 

Awareness Doesn’t Equal Acceptance

 

The price raises in cryptocurrencies has brought with it a lot of publicity. However, this doesn’t necessarily mean people are accepting of the technology. There are many including the head of JP Morgan, Jamie Dimon who regard Bitcoin with distrust.

 

Back in October Mr Dimon said he would fire any of his traders if he found out they were trading Bitcoins. Consequently, afterwards all the cryptocurrencies including Bitcoins fell. However, within 24 hours they had both recovered and exceeded where they were previously.

 

What lessons can we learn from this episode? Firstly, we could hypothesize that actually JP Morgan wanted to get long and his comments were a smoke screen. Certainly in a short space of time, sentiment within the bank has moved towards supporting their clients who want to invest in the market.

 

Secondly, we saw how ‘skittish’ investors are. They very quickly exited their trades before re-establishing their positions. If there’s one thing you should be doing differently to other investors, that’s developing patience.

 

That means you need to be willing to sit through the inevitable volatility. If you feel like selling your investment at the first negative sign, then you’re probably have too much hope and expectation tied into your investment. In other words, you’re investing too big. 

 

What Does 2018 Hold for the Price?

 

What’s in store for 2018?  I’m loath to doing forecasts. As Dan Gardner and Philip Tetlock wrote in their book, Superforecasting, humans are very bad at forecasting….

 

With that caveat, I’m going to do a forecast! I reckon we’ll see the price of Bitcoin breach $50,000 in 2018. However, don’t forget, before getting to 50K it can drop by 50% beforehand. There’s that much volatility at the moment. 

 

I recently did a poll of subscribers to the Free Bitcoin Beginners Course, where I asked where readers thought price would be next year. The majority (48%) thought price would be somewhere between 20K and 50K. This compares to 33% who thought that price would be above 50K. 

 

What are your thoughts? Where do you think price is going? Leave a comment below, it would be great to hear from you. By the way, if you’ve not checked out the series of articles I’m writing on “What is a Bitcoin”, check out this post Five Common Bitcoin Beginner Questions. You can also read How to Get Bitcoins if you want to get started in investing straight away.

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