Bitcoin in 2020

Introduction

Bitcoin price has seen downfall from 2017 after long trail of continuous uphilling. Downfall is not as sharp as its uphilling rate. However it has brought the reason for all analysis before buying which was not mentioned to do earlier by fellow people to me and others.

Observations on bitcoin historical data

Data point: https://coin.dance/volume/localbitcoins and https://bitinfocharts.com/comparison/transactions-btc-eth.html

• • Ethereum transaction Volume is surpassing bitcoin consistently for past 2 years.

  • Till 2017, price increase in bitcoin was matching the transaction volume.

  • Between 2017 and 2019, prices fall down more sharper than the volume

  • Between 2017 and 2019, volume is almost similar, but prices keep on falling (reached to 4K level)

  • From 2019 to till date, volume of transaction still reduced, but price of bitcoin has increased

  • There are many countries which are contributing to volume at much larger amount from much before 2017, however the rate has still fallen. Below are data.

    • Maxico, Hungry, Japan, Europe, Romania, Russia, South Africa, Sweden, Switzerland, Thailand, UK, USA are purchasers from bitcoin initial period and continue to be purchaser post 2017 as well

    • Hongkong, and India are matching transaction volume from 2017 ownwards during bitcoin price falls

Candidate reasoning

• Till 2017, people were ready to pay premium to buy

  • Between 2017 and 2019, High volume was towards people willing to sell and many wanted to buy due to reduced price. Panic on bitcoin holders make them willing to sell at much loss as prices was constantly falling

  • From 2019 to till date, due to 2+ years lowest price, people wanted to buy which leads to increase in price and then reached to the level it has now. But There can be other more stronger reason as well (like some tempting news ???)

  • Those many countries which continued in volume even after 2017 are not willing to buy at premium and price falls indicates selling of their assets during this time. Note that selling trend causes the fall in price and volume will be generated towards this as new buyers will take it due to relatively cheap pricing.

Analysis of current facts

Data points: https://www.moneycontrol.com/news/business/personal-finance/sc-verdict-on-cryptocurrencies-what-it-means-for-investors-5070381.html , https://www.coindesk.com/bitcoin-halving-explainer , https://www.coindesk.com/bitcoin-mining-difficulty-posts-biggest-percentage-drop-ever

• • India has joined the list of countries where people are free to trade cryptocurrency

  • Halving of bitcoin will result in the lower incentive to mine and will result in total production of bitcoin half

  • Bitcoin mining is not profitable considering current price of bitcoin

Candidate prediction

• • Considering further reduced incentive and higher mining cost, new coins will come at extermely lower rate.

    • If transaction volume goes same, then new buyer will need to rely on existing owners to sell and it will result in virtual demand increase causing price to jump

  • India being a second highest population and a very big economy, India news will give the positive signal to the world causing temptation to buy at already low price of bitcoin. So, this will increase demand causing price to go up.