Created by Bitcoin a real, albeit misunderstood, economy that is establishing itself, albeit slowly, in the new global money market system? An interesting view of bitcoin cycles inadvertently says that Bitcoin outperforms government money in the natural competition of the free market.
Bitcoin and its long cycles
A relatively very interesting article was published on Forbes, which summarizes the most common opinion of Bitcoin’s opponents and, conversely, the view of its supporters regarding BTC price fluctuations. One of Bitcoin’s biggest critics says that its price is irrational and purely speculative, without “intrinsic value”, etc. Critics often like to talk about the bubble when BTC reaches new highs, and even better about falling to zero when the cycle melts from a sharp downtrend growth…
Bubble, or is there something more in cycles?
Some outside observers had a simple answer to the BTC price. states:
“The simplest model for the mainstream was. The rapid growth of new cryptoactive assets and the growth of trading venues (some with dubious legal status) once again drove a market that was too driven. [vzhůru] inexperienced investors. ”
“How is it that prices have fallen again despite attention of investors and the media? Why was his 2017 chart so similar to the “bubble” of 2013? And why did the fall in prices in 2019 and 2020 stop at levels much higher than those observed years ago?
To answer these questions, a new hypothesis has emerged: What if the “bubbles” of bitcoin prices are a product of its programming? “
Cycle specified in the code parameters – Bitcoin
If it was just a bubble, it would burst and Bitcoin would go to zero. Critics’ frequent opinion would be confirmed if the “mania” disappeared and the price of BTC took somewhere to zero. If, on the other hand, it has a future, the opinion of the supporters may be confirmed. They claim that with the development of the bitcoin economy, its price will rise until eventually the value of the bitcoin system (and its assets) will be much higher than at present.
“Every four years, the price rises to a new all-time high, then falls, but never falls below the price set at the peak of the previous four-year period. Since then, the price has been rising steadily to the point where the growth rate of supply changes [halving], and the cycle repeats.
If this formula is to continue, we are about to enter a period when Bitcoins will soon be hit by new historical highs for the third time, setting a price level followed by another four-year cycle of predictable performance. ”
Conclusion
The cited theory of 4-year cycles has been known for various periods. He says that due to regular supply shocks (halving coin production every 4 years), Bitcoin uses its own parameters in the code to create 4-year price cycles. It is unlikely that this view is shared by at least some of the institutions that still hungrily buy BTC.
“I believe that in the coming months we will see the price of Bitcoin rise to new highs. When that happens, we will have to ask ourselves whether the software that created the conditions for the three “bubbles,” each of which is exactly four years old, can even be said to create some bubbles. “ concludes with the proviso that, in the end, only one of the two onlookers may be right. According to this, Bitcoin will eventually go at either zero or much higher and prove to be the software technology that creates the global digital money system.
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