It’s been a tough year for Bitcoin with the cryptocurrency entering its longest correction ever. Speculators are still salivating over the possibility of an ETF coming to the rescue and injecting cryptocurrency with institutional income, but many in the tech world are divided in their opinions about it. If you already own Bitcoin, it could put a lot of money in your pocket.
But there’s another way to look at the long tail of Bitcoin’s bear market. In fact, it could be a good thing. Here’s 3 reasons you may want to rethink your opinion on the Bitcoin correction.
#1 Correction Is Better than Crash
One often-used analogy for the markets is that it’s a pressure cooker: if you leave the heat on without releasing some of that pressure, it’s going to explode. A correction lets some of the pressure out of the market, and that’s what’s happening with Bitcoin.
Last year, Bitcoin was over-valued. Prices had shot up too high based on speculation, not real value. But the correction is giving Bitcoin a second chance; it’s the alternative to a total market crash that would have wiped out the value of Bitcoin entirely. Today, with prices around $3,500 Bitcoin remains much more valuable than it was only a few years ago. Don’t forget how short the history of cryptocurrency is.
A correction also gives new investors a chance to get see some profits by buying low and seeing where things go. Before you buy Bitcoin, do some research into cryptocurrency exchanges. Exchanges like Bitbuy let you withdraw and deposit cryptocurrencies themselves with no fees and have low fees for fiat currency deposits and withdrawals. The more you can save at the exchange, the better your returns will be. They also let you deposit money directly from your bank account using Interac; stop by Bitbuy to learn more about Interac deposits on cryptocurrency exchanges.
#2 Stable Bitcoin Prices Are Necessary for Adoption
If Bitcoin is going to be widely adopted, prices need to stabilize. Retailers and companies looking to use cryptocurrency as a B2B solution (in order to save on the high fees that can come with transferring tens of thousands of dollars) want cryptocurrency prices to stabilize before they make the switch. They can’t afford to accept an asset as payment if that asset could lose 20% of its value the next day. If the correction leads to stable long-term prices, that’s a good thing.
After all, while high Bitcoin prices are great for the true believers, the cryptocurrency was originally developed to offer a viable alternative to the banking system.
#3 Cryptocurrencies Are Solving the Fee Problem
When Bitcoin was skyrocketing to $20,000, followed by a tense period of ups-and-downs, some companies that had actually adopted Bitcoin dropped it, including Steam, which cited high fees and high volatility. At the time, Bitcoin transaction took a long time and could go as high as $20. For a currency that was meant to reduce the costs of financial transactions by moving away from the banking system, it just didn’t make sense.
Cryptocurrencies like Bitcoin and Ethereum have been working to speed up transactions and reduce fees. In the long run, this will encourage other online (and potentially brick-and-mortar) vendors to start using the cryptocurrency.
The correction may have speculators down, but there’s more to the story. Ultimately, greater stability is what’s required for cryptocurrency to truly become useful, rather than just a speculative asset class.