Bitcoin to Lose $44 Billion in Market Cap This 2018

The future of Bitcoin is simply becoming unpredictable at this point. The slightest adjustments by regulators could make the price fluctuate up or down. However, one thing is true, Bitcoin’s price is no longer near its all-time high last December 2017.

Last year, Bitcoin and cryptocurrencies made it mainstream. And for this reason, Bitcoin’s market cap has even reached around $603.3 billion in December. As of writing this article though, it has already depreciated to only $114.8 billion.

What’s Next for Bitcoin?

Researchers from Switzerland have come up with a twenty-page study regarding the predictability of Bitcoin bubbles. They made use of Metcalfe’s law and Log-Periodic Power Law Singularity and were able to determine the future of Bitcoin. And if you are invested in Bitcoin, it could be a tough year ahead according to their study. They discovered that it is possible for Bitcoin to lose as much as $44 billion or roughly 35% of its market capitalization by the end of 2018.

The recent Study “Are Bitcoin Bubbles Predictable? Combining a Generalized Metcalfe’s Law and LPPLS Model” by Spencer Whetley, Didier Sornette, et al, of ETH Zurich’s Department of Management, Technology and Economics, and Swiss Finance Institute at the University of Geneva, Switzerland, attempted to come up with diagnosis regarding the future of Bitcoin.

According to Wheatley, he explained that “We develop a strong diagnostic” in terms of looking at the cryptocurrency’s future. He also added that “for bubbles and crashes in bitcoin, by analyzing the coincidence (and its absence)of fundamental and technical indicators. Using a generalized Metcalfe’s law based on network properties, a fundamental value is quantified and shown to be heavily exceeded, on at least four occasions, by bubbles that grow and burst”.

What Exactly Is Metcalfe’s Law?

If you are going to take a closer look at Metcalfe’s law, it has postulated that the growth of a telecommunications network is equal to the square of the number of connected users. Still sounds a bit complex? It simply means that bitcoin users are declining in number.

And if you will look at the numbers recently, the numbers are all down. Many have raised their concerns regarding the use of cryptocurrencies in money laundering and even in tax evasion cases. The number of scandals including exchanges also didn’t help in bringing the value of Bitcoin up.

Buy Low or Sell Now?

You have to take a closer look at the big picture before you even decide to buy low or sell your bitcoins. You have to consider the fact that the technology is still in its early stage. In addition to this, it is still vulnerable to market manipulation.

In fact, a trustee of the already defunct Mt. Gox has reportedly sold around 35,000 bitcoins that were worth around $400 million during that time. It is true that there are many things that you should consider. You also get to see the likes of George Soros who is already rumored to be investing in cryptocurrencies. But of course, don’t be fooled by the numbers that you see. Keep in mind that these whales have enough assets to invest without breaking the bank.