Is Bitcoin Going to $5k Again?

Bitcoin just barely hit $5k on some exchanges back on Sept. 1st before dropping to nearly $3k. Here in early Oct it is nearing $5k again. Will it get there?

There is no real way to know what Bitcoin will do, but we can look to understand why BTC went from about $1k to $5k in 2017, only to come back down again, only to go up again… and from that we can start to get a sense of the future.

First off, the BTC run-up this summer was spurred on by a wave of excitement that came from 1. wider adoption and interest of cryptocurrency by the general public and 2. the Bitcoin Cash “Hard Fork.”

You see, if you hold Bitcoin when it does a hard fork and splits into a new cryptocurrency, you get equal parts of the new coin (you get 1 Bitcoin Cash for every Bitcoin you have in a wallet). That is, you get free coins.

Thus, for the above reasons, people flocked to btc, which drove up the price of alts (and caused a wave of ICOs to come out of the woodworks, which drove excitement more). That then caused a spiral of exuberance and speculation. As look, when Ted down the street goes from 10 bitcoins for $225 each to 10 Bitcoins for $2225, Jane down the street from him opens a Coinbase account so she can get rich too!

Of course, that invokes concepts of bubbles and Ponzi, and that is exactly what central banks and governments saw too.

Thus, China announced just as BTC was nearing a high that they planned to ban exchanges. This is a problem, China has one of the biggest Bitcoin economies… and thus, with $5k hit as a milestone and with China news coming out, while the U.S. enjoyed the night time on the weekend, China woke up and started selling Bitcoin in a panic (thus crashing the market).

Power traders had their stops set, or shorted, or got out. But the average Joe long-in-crypto investor woke up to less money.

Then for weeks cryptos toppled down a hill, with nary the dead cat bounce.

Finally, $3k was reached (over more China news, again in the middle of the night for us here in the U.S.).

Then a happy rebound. Then some stagnation.

Then, some strange message came out of the woodwork that a new fork was coming. Bitcoin Gold. That means more free money!

Now everyone is flocking back into BTC (which is justified). Now $5k is in the sights again.

… but now Russia just announced they will ban exchanges (although they will offer citizens access through centralized exchanges, word is).

That said, China and Russia exchange bans aren’t the end of crypto. In fact, China, Russia, and Bitcoin Gold are essentially all uncertain. It could be that China and Russia don’t act, and it could be that Bitcoin Gold is rumor spread to pump Bitcoin.

With all the unknowns, speculation, ICOs, government regulations, and price spikes… who can say if the future is $5k, $6.4k, back down to $3k, or back down to $10 (probably not that; coins will generally always cost at least what it costs to mine them, so like upwards of $1k at least for BTC is very likely).

So then, our advice (that is not professional advice; see the site disclaimer): just keep doing what you are doing. Enjoy trading BTC and alts, but set some reasonable stops and don’t ride the cryptocurrency market into the ground. It could be that we see big days ahead for crypto in terms of prices (either up or down), or it could be that we see a steady market ahead. If you try to get rich, you could end up disappointed, if you embrace the new technology conservatively and keep your eye on the news, you are likely in for a fun (although rather roller-coaster-ish) ride.

Author: Thomas DeMichele

Thomas DeMichele has been working in the cryptocurrency information space since 2015 when was created. He has contributed to MakerDAO, Alpha Bot (the number one crypto bot on Discord),...

Leave a comment

We'll never share your email with anyone else.