What is going on with bitcoin now and what to expect from it in the future? This issue has become a key issue for a huge army of cryptocurrency market participants.
The great economist John Maynard Keynes believed that a significant portion of our best investments depend on spontaneous optimism rather than expectations, based on mathematical calculations.
At the time of this writing, a bitcoin was worth 8,000. It has fallen by more than 50% since December last year. Is this due to "spontaneous optimism"? Is it possible to reduce the rate of cryptocurrency only the result of government regulation and the emergence of futures?
Nobody can predict bitcoin price movement. But there are analysts who believe that bitcoin is a bubble and soon it will explode. After all now is happening the, that they foreshadowed.
What Keynes meant when talking about spontaneous optimism is now happening in the bitcoin market. We usually invest in things when for some reason we are sure that their value will increase. It's human nature.
But what asset should be estimated, sooner or later the market will decide.
What's going on in the bitcoin industry? This includes professionals and Amateurs with different interests. Some of them are short term traders, while others accumulate funds for retirement.
What is the strength of bitcoin and other cryptocurrencies? According to a recent study, the driving force here is a group of people who own the lion's share of the cryptocurrency in circulation.
The journal of Monetary Economics recently published an article about what happened in the bitcoin industry:
Suspicious trading activity of MT exchange.Gox, which caused a huge surge in bitcoin exchange rates at the end of 2013. Then there was a sharp price jump from$ 150 to$ 1000 for 2 months.
Why does this happen to bitcoin? In cryptocurrencies, the pricing process is still a mystery, which is not a positive attribute of the market economy. Sooner or later, the excitement and agitation that took place at the end of last year will disappear, and the spontaneous optimism that pushes prices will subside, guiding them down. That was the rule of the markets long before Keynes.
Bears will stop celebrating victory in the bitcoin market when the tax season is over. Experts believe that the cryptogram of 2018 was largely due to the fact that investors feverishly sold funds to be able to pay taxes for 2017.
And tax deductions in Japan occur until March 15. This country, as well as the United States, has a huge bitcoin market. Therefore, the hypothesis that the decline is due to this reason is well justified.
Known strategist Perry Woodin against such explanations. He made the calculation:
Imagine that a person bought 1.5 btc in January 2017 for 1,200. He sold one bitcoin in December 2017 for 18,000. This profit in the US is taxed as ordinary income (assume 30%). Obligations to the budget will be about 5,400. The remaining 0.5 btc-3350$ is not enough to repay them.
So what's going on here is not a tax sale. It's completely irrational.
