Where is Bitcoin headed: Rolling the dice

With the entire financial world obsessing about cryptocurrencies in the last 12 months, it’s hard to imagine that the big daddy, Bitcoin, has been around for almost a decade; in fact, Bitcoin is celebrating its 10th birthday in just under two months. And you could describe virtually any aspect of its existence with a single word: rollercoaster. The price, the investments, the adoption, the underlying technology – everything about Bitcoin seems to be happening in cycles, following somewhat predictable patterns with both positive and negative amplitudes showing uptrend over longer periods of time.

The current value of Bitcoin is $6,600.00, and it’s been steady under $7,000 for a while. In the light of the bull run which took BTC to its all-time high just short of $20,000, but also the events which followed and took the price down by two thirds, there are many questions being asked, and rightfully so.

Is the current state of things actually a sign of maturity of the market, or is every single event just a manifestation of manipulations masterminded by Bitcoin whales? Are Tim Draper’s predictions about Bitcoin reaching $250,000 by 2020 even possible, or is the goal of such claims to simply attract small investors and drive the price up a couple of hundred percent in preparation for a huge sale which drops the price so steep people have no time to react?

This scenario is not entirely impossible – in fact, the exact same thing happens several times, every single day, in this unregulated crypto market. Only, the target is different: it’s altcoins.

Making digital money using social engineering skills

There are currently more than 2,000 cryptocurrencies, 99% of which either don’t have a working product or a defined roadmap because practically anyone with some knowledge of blockchain and a programming language such as Python can easily create a fork of an existing cryptocurrency. It’s an educated guess to say most of these will vanish after some basic global regulations are in place, but until then, these coins and tokens are the perfect way to make rich even richer.

The mechanism is always the same: if the price of an altcoin is considered relatively high, FUD (Fear, Uncertainty, Doubt) is spread over social media to initiate massive sales and drive the price down. When a bottom is reached, a certain group of individuals starts pumping massive amounts of Bitcoins into the altcoin’s market share, artificially driving the price up (the so-called “pump”). As the price surges, FOMO (Fear Of Missing Out) kicks in among the inexperienced investors who see this as an opportunity to earn money quickly, their investments driving the price even further up. Unfortunately, at this point, it is way past time to invest, as most people are totally unaware of what happens next: “dump,” a massive sell by the group which originally “pumped” the price up.

Everything is, of course, pre-arranged, and every action carefully synchronized, usually via securely encrypted private chat rooms on Telegram. Once dumping is initiated, the price usually drops so fast even people who are logged-in and trading on the market at the moment don’t have time to react before taking substantial losses.

So, what exactly does pumping and dumping altcoins have to do with Bitcoin? Well, just about everything, considering the fact that the exact same scenario is applied when manipulating its price, with one notable difference – when investing in altcoins, most people use whatever small amounts of BTC they have, and when investing in Bitcoin… well, just the usual stuff such as salaries, college funds, life savings or just about everything you own, just as Didi Taihuttu did a couple of months prior to BTC ATH peak. While he still has every right to hope for a major reversal which might earn his family their home back, the sad truth is that your usual crypto-investor is inexperienced, prone to panic and has unrealistically high expectations without any basis in reality whatsoever, which is abundantly abused in Bitcoin price manipulation.

As stated previously, the principle is the same, only stretched over a longer period of time, and often involves serious amounts of institutional money. An unsuspecting mind is wrapped in an illusion of a long-term growth backed by large investors, and this illusion easily obscures the obvious fact that everyone and every entity is in it for one thing and one thing only – money. And that’s fiat money.

Light at the end of the tunnel

Judging from this, one might make a premature conclusion that the future looks rather grim for Bitcoin and the entire crypto world but, in all honesty, an optimistically biased conclusion couldn’t be any farther. Blockchain, the foundation of every cryptocurrency, is a versatile technology still in its infancy, showing great development potential. There are ongoing global efforts to patch all of the volatilities of the cryptocurrency market and introduce a sort of an ordo ab chao.

Once the market is regulated, if everything happens as predicted, there is no reason it shouldn’t flourish – but it will be a slow growth, generating steady income for early investors over the course of years instead of hours. If you want to stick with more traditional ways, you might decide to trade on an established and trustworthy platform such as Forex where many brokers now accept BTC deposits. And yes, there is still time for you to hop onto the “early investor” train if you decide to invest now because cryptocurrencies are here to stay.

So, what are the options? While this may not be that easy to believe, most people know only about Bitcoin, maybe Ethereum. The rest of the alt-world is known only to those actively engaged in crypto-trading. But even now, there are many more investment opportunities.

XRP is the third largest cryptocurrency, threatening to permanently overtake Ethereum at the second place, which has happened twice already in the past year. It peaked at just above $3 and is currently sitting just under $0.5, which is a great potential ROI.

A little less obvious choice, but perhaps a much better one long-term is Stellar (XLM), already adopted by IBM. It’s more than just an altcoin; it’s an ICO/IPO platform with its own decentralized exchange well underway.
ADA (Cardano) might also be a good long-term (meaning at least three years in the future) investment since it’s still under development, but with a well-planned, transparent roadmap ahead, and a legitimately skilled team.
TRX (Tron) is still somewhat controversial since it has a history of overhyping and “borrowing” code from direct competition, but truth be told, that’s already ancient history in the crypto market timescale. The Tron Foundation has made some seriously good business moves lately, and the coin itself is very cheap at the moment – TRX peaked at about 13 times its current value.

In other words, as Vitalik Buterin himself said, people should probably be more realistic and not expect insane gains overnight. However, if you’re in for the long haul, there is still a fair chance you could earn enough for a decent retirement; the only weapon you really need is patience.