ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Why Bitcoin's Price will Grow Again

Updated on June 16, 2018
JakeDavis profile image

I am a writer. Since 2013, I have owned a local newspaper in Wewoka, OK, The Wewoka Chronicle. I am currently freelancing on Snip.Today.

Source

Background

Bitcoin started in 2009. An unknown person using the alias Satoshi Nakamoto wrote a whitepaper about his decentralized token. That has two meanings. First, Bitcoin doesn't need a bank (Automated Clearing House [ACH]) to process transactions. Instead, processing happens across a lot of devices in a variety of places around the world. The other, Bitcoin is not an official currency of any country, thus has no central bank. It worked out for him, whoever.

The first sale using Bitcoin was by a man from Florida 2010, who bought two large Papa John's pizzas for 10,000 BTC through a post on a forum where Bitcoin was discussed. Not long after, the price reached $1. Bitcoin's rise was smooth sailing from there.

2013 was a breakout year. The price crossed the $100 mark in June and the $1000 mark in November. The price was up and down during 2014. In 2015, it began to taper off and people thought the party was over. That is until December of that year.

In the last week of December 2015, the $230 BTC more than tripled to $720. That was the week I started Bitcoin. My third and fourth Bitcoins tripled while I was sleeping. I was hooked from then on out.

2016 saw stability. The price grew to $950, but more importantly, it didn't drop. The fact that it didn't lose value brought thousands upon thousands on board. When it would originally take me 3 hours to sell a Bitcoin over the counter, I could now sell a higher priced Bitcoin in a little under 2 hours. 'Hog Heaven' is the best way I could describe this. There was no way this could ever get any better. Then the forks came.

2017 was an astronomical year for the now pop culture phenomenon. The 'forks' were duplications of the token system, and they actually let you keep the duplicates with value in the tokens. I almost fainted every single time that it happened. It happened four times that year. I was giving Bitcoin away in a drunken frenzy. I did sober up.

On December 15, 2017, the price of a Bitcoin reached $19,700. Cex.io had the price at $20,200 that day. (Cex.io has a higher cash out price for Bitcoin most of the time.) And then the 16th came. The price dropped a couple of thousand dollars. Then more the next day, and the day after that. You get what I am getting at. Panic set in and people began to wonder why.


Source

The Problem

The truth is, on the 15th, the Chicago Mercantile Exchange (CME) began trading Bitcoin futures. CME is a known futures market where a lot of stocks show up healthy, and never make it out. Futures are simple, and ingenious. The seller sells a Bitcoin on the promise of delivery in the future, say six months later. The seller then buys a Bitcoin after the sale date, but before the delivery date, at a lower price. A Bitcoin is delivered when promised, no matter what the price is.

That is why the price of a Bitcoin has faltered even though the altcoin industry has taken off the way that it has. The CME is hitting people over the head with a spiked baseball bat with barbed wire wrapped around it.

Source

The Solution

Not to fear, Bitcoin will be back and the CME will be why. There're two reasons why this is going to happen. The first, is the CME didn't foresee President Trump's trade policy. The second, is that digital tech is not something you can put a tariff on. If it wasn't for this, Bitcoin would be doomed. Yet, Bitcoin is going to be the saving grace of the world's economy.

President Trump's trade policy is his response to intellectual property theft by China. In his belief, China was 'punking' American thinkers out of their money by stealing ideas from inventors who would use China's massive third-party manufacturer market. He applied tariffs on Chinese and Russian imports, and they responded with the same.

A war of words ensued and created more tariffs and hit the American farmer hard. Traders are now stuck with futures they purchased months ago. Should they go to China, the world's largest country and economy, with their goods, they will have to pay higher tariffs upfront. America suffered a 40% trade deficit because of the trade policy with China alone.

Then came Trump's opinion of NAFTA. He doesn't like it. In fact, when the numbers from his trade policy with Asia showed up, he decided to shift the burden to Mexico and Canada. He even added tariffs to European nations which made feathers ruffled. National leaders voiced their displeasure with the President over having to pay for his folly with China.

Trump's trade policy is not going to hurt the U.S. alone, internationally countries will not be purchasing from the U.S. as well. There will be shortages there while here, there will be food going to waste. Some farmers have said it's a shame to see all their hard work go for nothing.


Source

Bitcoin has the Mojo

How will traders make money in all this? Time will tell. Cutting off what was once the world's strongest economy from both imports and exports is going to slow economies down. The way for nations to meet their needs is to pay higher prices to everyone.

Enter Bitcoin to the picture. The CME can't afford to lose everything they made months ago. They will have to deliver. Low Bitcoin prices can give them an edge they need to stay afloat if the market gets as bad as it looks. Buying at low prices will give the CME a large stock of Bitcoin, and higher prices are right around the corner. Possibly higher than last December. If the price of Bitcoin goes higher, the CME can then sell their large supply of Bitcoin for making large profits.

CME can certainly buy a lot of Bitcoin, and then take them off of trade exchanges to create demand and bring the price up. More importantly, make up for the losses Trump's trade policy is inevitably going to cause. This is not up to the CME alone, but hypothetically, they caused the price problem and it's up to them to fix it.

The altcoin market has grown to well over 5000 different types of tokens. They live and die with the price of Bitcoin and spread the value of Bitcoin around. This has brought the price of Bitcoin higher and higher before, and it will do it again.

The Bitcoin network is also faster and stronger than ever. A year-and-a-half-ago, the Bitcoin network could process 2 TH/s. That number has grown to 60 TH/s thanks to the new 'Lightning Network.' It's a network meant to compete with the speed of the Ethereum and Litecoin networks which have transactions take place in 30 seconds. Last year, a Bitcoin transaction would take 45 minutes.

This is my theory. I don't speak for the CME, Bitcoin, or anybody actually. But the logic is there for you to think about. Bitcoin will rise again, not go away. Whether it's through another currency, or the flagship, it's going to happen. The question is when. But, as it stands, it's a good time to get on board.

Poll

Bitcoin is in a price slump, and the CME is headed for one. Will CME take this route?

See results

© 2018 Jason Davis

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://maven.io/company/pages/privacy

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
    ClickscoThis is a data management platform studying reader behavior (Privacy Policy)