Is Bitcoin Still In A Speculative Phase?

By October 2, 2014Bitcoin Business
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Is Bitcoin Still In A Speculative Phase?
Is Bitcoin Still In A Speculative Phase? – There would be no doubt in admitting that Bitcoin rose to fame only because of being highly volatile. In times when its value was shooting upward overnight, many traders thought its trades as a money-making opportunity. And indeed, Bitcoin’s early adopter went home with millions in their pockets.

There was always a huge expectation from Bitcoin to outperform its own success; which explains why its community rose by over 500% since its inception. The truth somewhat is that Bitcoin was always in a speculative phase. The technology was new to everyone – investors and media alike. So a certain hype was apparent. But the ultimate question is: Is Bitcoin still in a speculative phase? We’ll try to answer it with the following example.

Suppose you live in a desert which has water-shortage. By some luck, you discover a lake deep down in a cave. Like a normal pre-Noah-era human, you decide to put your greed on it, i.e. decide to sell water for profit. It is obvious that the rising demand of water will make people buy it even at inflated prices. And considering our water-buyers some good enough traders, they will also try to conserve the water for future investments. Knowing the entire, but limited amount of water available with you, they will indeed persuade you to sell shares of the water to them. It is nothing but speculations that the water is limited against the demand, and its value thus is poised to shoot towards skies.

But what if you get to know that some god-following man has found 100 other lakes in the same area, ultimately ending the water supply problem all at once. How much value does you investment hold then? Probably, a little as you hold the reputation of being the most reliable water provider. But indeed, you cannot enjoy the peak on which your business was once, until and unless you plot to destroy all other lakes. Please don’t do it, seriously!

Now consider Bitcoin as the first-ever lake, whose value grew just out of expectations. Meanwhile, also consider altcoins as other lakes which are just looking for reasons to dethrone Bitcoin from its top position. But overall, you have ended up creating a water-based economy; in this case, cryptocurrency-based. Meanwhile, apologies for the craziest example; pun intended!

Coming back to the same question. Is Bitcoin “still” in a speculative phase? The answer lies in a midst of ‘Yes’ and ‘No’, with more inclination towards ‘No’. ‘Yes’ because markets are still full of entities that are simply holding onto their investments, while expecting a miracle in Bitcoin markets. They can be anything from early investors, to Bitcoin exchanges, to Bitcoin payment processors, to miners – anyone.

A ‘No’ because the Bitcoin market is actually looking more mature than its early behaviors. The growing investments in this field indicates a long-term trust companies have on this technology. The constantly booming merchant adoption rate is another thing which is adding pressures on Bitcoin to stay here for long. Eventually, it is not the price now which decides whether this coin will stay or die, but the organic growth of its usability as a real currency.

Even though, Bitcoin is still far away from reaching the total-adoption rate thanks to the low buying pressure. A large section of online retail users still shy away from using Bitcoin for goods, probably because it looks too complex to an average-Joe. To ensure their leading stand in the market, the Bitcoin Foundation should actually adopt methods to advertise Bitcoin among regular people, much like the way debit and credit cards have done so far. Then we might actually take Bitcoin out of its speculative phase, once for all. It might actually curb the volatile quotient as well. Fingers crossed!

To contact the reporter of the story: Yashu Gola at

There was always a huge expectation from Bitcoin to outperform its own success; which explains why its community […]

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