There are all types of information darting around the world about where Bitcoin will go from this point onwards. Let the guy who first bought it at $50 and then much more at $200 tell you how he sees it going.
Like always, the biggest issue for Bitcoin and any other digital crypto-currency is this; how will the illegal ownership of cryptocurrencies affect the industry?
To date, China has banned its population from owning Bitcoin and South Korea has threatened its population recently by announcing its intention to ban Bitcoin but is yet to back up their threat with any action other than applying tax to profits.
Though China has banned exchanges operating in its country, these same exchanges have simply moved to neighbouring countries and Chinese investors have simply found unique ways to buy cryptocurrencies behind the backs of their government. In other words, the ban has not fully worked.
On the flip side, the Venezuelan Government has announced its intention of launching its own digital currency backed up with its vast oil reserves. The Russian Government is also supposedly not only in the process of creating Legislation to legalise cryptocurrencies but is also looking to launch its own digital coin.
So where does all this leave us? One thing I am sure about is that thanks to the block-chain technology, the algorithmic system upon which Bitcoin is based on, no government is able to completely destroy Bitcoin. All they can do is make it illegal and difficult for its local population and ensure that banks operating in its jurisdiction does all it can to report those individuals who try and covert their digital currencies to local fiat currencies such as the US Dollar, the Euro or the Great British Pound. But will that be enough? After all, it all comes down to the people complying.
What is illegal and morally incorrect in one country, may be perfectly legal and acceptable in another. Take smoking marijuana and prostitution in Great Britain. They are both illegal yet many British travellers travel to Amsterdam in the Netherlands where both these activities are legal to carry out. Has making either of these two activities stopped those people in Britain who still want to be conducting them from travelling to Amsterdam to fulfil their desires? No, definitely not.
So if countries like Russia or Venezuela legalise cryptocurrencies, will investors not continue holding them and using their digital currencies as they wish? This notion seems even more realistic when we consider how tracing owners of cryptocurrencies is virtually impossible because of its cryptic aspect. Its only when cryptocurrencies are converted to standard currencies do they become visible to the system.
So where does this leave potential investors? Nobody knows what will happen with certainty but here is my take on it is. As more governments make cryptocurrencies illegal there will be extreme downward pressure on the price of Bitcoin and other cryptocurrencies. In response to this, the more governments looking to legalise cryptocurrencies, the more upward movement in price we shall see. This is a war and like any war, nobody knows who will win so therefore, investors may look at good entry points to accumulate bitcoins with risk attached but only at certain prices levels.
In my calculations, these price levels of good entry are $5000 and $3000 or below.
It is also worth noting that a US based Corporation called Kodak has also announced its intention to launch its own cryptocurrency. And since many analysts view corporations as a mini version of their host nation government, then could this be an indication of things to come?! Let’s find out!
Image courtesy of Sira Anamwong at FreeDigitalPhotos.net