[FM] Why is the price of Bitcoin dropping when the fundamentals are so strong.

[Jet Cash]

I'm interested in the opinions of people who are new to Bitcoin, so I have started this thread with the potential to gain merits.

The price of Bitcoin is dropping at the moment, and it looks as if it is likely to drop even further. This is contrary to the Bitcoin fundamentals, which have never looked so strong to me. The hash rate, Lightning network use is increasing, the number of addresses are increasing, and there are numerous other indicators. Although my main interest is the opinions of newer Bitcoin users, as they may reflect current public opinion, I'd also welcome the opinions of more experienced Bitcoiners.

You can also speculate about the turning point of the Bitcoin price. There seems to be a wide variety of estimates about the time and level of this reversal. I've started this thread in the beginners board, because I think it is important that newcomers to Bitcoin understand some of the factors that influence crypto prices in this volatile market.

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[Lund94]

From my point of view its a question about supply and demand.

I live in Scandinavia and when the BTC price was at its highest everyone talked about it. Unfortunately people only wanted a quick profit so they bought high and sold low.

I think a lot of those people who were in for a quick profit lost lots of dollars are afraid to join again -
I also think that one of the larger problems is to convince people who know nothing about cryptocurrency to buy.

When "normal" people talk about BTC its only the negative stories about people who lost their investments, and not the opportunities behind blockchain technology.
They're not even aware about there's other kind of cryptocurrencies than BTC (You'd be lucky to talk with a person who knows about any altcoins).

[OgNasty]

The short answer is that big bubbles take a long time to deflate. We’re pretty much mirroring past bubbles. I expect the end of the bear market is near.

[Crypto-DesignService]

This are the things I think affect bitcoins value

1. FUD creates PUMPS/DUMPS scenario
2. Cryptocurrency restrictions for different countries
3. Lack of adaptability for real world services
4. Scams that correlate with bitcoins name, there are a lot of scam that people can think of when you say Bitcoin, people that are not too technical tend to believe that Bitcoin = scam whereas it is clearly not.
I also consider the thing that they call 'big whales'.

[tyz]

The short answer is that big bubbles take a long time to deflate. We’re pretty much mirroring past bubbles. I expect the end of the bear market is near.

This is certainly an important factor from a macroeconomic point of view. Another is that, unfortunately, Bitcoin has still not fulfilled its promise to be a usable currency.

[Jet Cash]

Another is that, unfortunately, Bitcoin has still not fulfilled its promise to be a usable currency.

In my opinion, Bitcoin was not created to be a usable currency. The block generation interval, and the 21 million cap, were obviously included to prevent this. It has become a wonderful store of wealth, and a means of asset transfer and payment. The Lightning network is probably an unplanned innovation, and allows it to become the security for a more general fast payment service, but this is still a form of banking. The growth of the Lightning network is one of the things that should be contributing to a rise in price.

[tyz]

In my opinion, Bitcoin was not created to be a usable currency. The block generation interval, and the 21 million cap, were obviously included to prevent this. It has become a wonderful store of wealth, and a means of asset transfer and payment. The Lightning network is probably an unplanned innovation, and allows it to become the security for a more general fast payment service, but this is still a form of banking. The growth of the Lightning network is one of the things that should be contributing to a rise in price.

Satoshi wanted to create with Bitcoin an alternative to the financial system, which took a lot of tax money to save banks (see message in genesis block). Therefore, it seems obvious that he saw Bitcoin as a usable currency at least in the long-term development. Lightening is certainly an interesting starting point. Nevertheless, after more than 10 years, Bitcoin's usability remains unavailable to the masses.
I personally don't count in BTC anymore but only in Satoshi. From this point of view there are more than enough units to theoretically be a world currency.

[anu1908]

Another is that, unfortunately, Bitcoin has still not fulfilled its promise to be a usable currency.

while it's true satoshi described Bitcoin as a peer-to-peer electronic currency, I think the design is more suitable for store of wealth and probably a transaction which requires a very secure confirmation. as Jet Cash mentioned, from the beginning security and confirmation is more important than scalability/speed of transactions.

Murad Mahmudov argue that the first layer of Bitcoin is more appropriate or suited to move/transfer assets in a large amount, so that they benefit from a relatively low fees and very secure confirmation, while the second chain and so on will be much faster. it's more or less similar to how we transfer/move gold, while the second layer with gold as the basis (paper money) is much faster but less secure (you can fake it).

i think the reason Bitcoin price dropping lately is because in general, Bitcoin is viewed as investment. a lot of people in the late 2017 join the ride and some of them exit it when the price reach its peak, buy pressure got weak because there's no more people who wanted to join the ride and then sell pressure increase. sure, bitcoin network, development and so on is going on, but the public doesn't care about that, because they want to make profits in the shortest amount of time possible.

the delay of Bakkt and ETF, and other news, can fuel negative sentiment in the market (even though it's irrational). it's like a snow ball, one people tell this is bad news, and others start to consider that and they exit or sell bitcoin to avoid further loss. on top of that, it's hard to separate crypto/Bitcoin from pump & dump scheme at this moment because several actors makes it go that way. for example, the over hyped Bittorent which is now trading at 4x even though there's really no use for this token proof it.

lightning network is good, but people who use it is not so many. i bet there's a few of us who use lightning and there are more people who trade/speculate with ico. because of this, the majority will always be those who're so easy to get swayed by bad news and doesn't care about development, which in turn will sell or buy when they feel they can gain something from it.

just my 2 cents.

[buwaytress]

From my point of view its a question about supply and demand.

I live in Scandinavia and when the BTC price was at its highest everyone talked about it. Unfortunately people only wanted a quick profit so they bought high and sold low.

I think a lot of those people who were in for a quick profit lost lots of dollars are afraid to join again -
I also think that one of the larger problems is to convince people who know nothing about cryptocurrency to buy.

When "normal" people talk about BTC its only the negative stories about people who lost their investments, and not the opportunities behind blockchain technology.
They're not even aware about there's other kind of cryptocurrencies than BTC (You'd be lucky to talk with a person who knows about any altcoins).

Can't say I know much about your region (and I have confused it with the Nordics and they sometimes kick me for it) but I always see many strange juxtapositions there. You've got one of the most forward societies when it comes to tech, among first to truly embrace internet. I remember talking to my first Finns in early/mid 90s and marvelling at their infrastructure while we had our first private ISP deliver expensive and slow text-based internet. Also one of the first to be near-cashless. Yet Bitcoin hasn't seemed to take hold there. Never mind the stubborn Scandinavian banks who've been quite comfortably anti-Bitcoin from the get go, but the same online nerds I'd known from the 90s who were top of the tech adoption curve... they just had a general "meh"ness towards Bitcoin.

The newer generation into quick profits? Same like the rest of the world then.

(Sorry, not the newest of newbies, but a 2016'er surely will never be experienced, right?)

[deisik]

The price of Bitcoin is dropping at the moment, and it looks as if it is likely to drop even further. This is contrary to the Bitcoin fundamentals, which have never looked so strong to me. The hash rate, Lightning network use is increasing, the number of addresses are increasing, and there are numerous other indicators. Although my main interest is the opinions of newer Bitcoin users, as they may reflect current public opinion, I'd also welcome the opinions of more experienced Bitcoiners

I'm not sure if Bitcoin fundamentals look strong as what you call "fundamentals" is nowhere near being that. The number of addresses increasing? And so what? If this growth is not accompanied by the consistent rise in the number of transactions (a metric which could count as fundamental but this number is not rising much anyway). Lightning network use expanding? Are you sure? It is the number of nodes and payment channels that is rising (which is a good thing), but how do you know that these channels are actually used for transacting with Bitcoin?

The bottom line is that the metrics you describe as fundamental can only be used as circumstantial evidence at most

[Wind_FURY]

Another is that, unfortunately, Bitcoin has still not fulfilled its promise to be a usable currency.

In my opinion, Bitcoin was not created to be a usable currency. The block generation interval, and the 21 million cap, were obviously included to prevent this. It has become a wonderful store of wealth, and a means of asset transfer and payment.

I believe Bitcoin, if used only as a viable store of value by everyone, is still a big win.

The Lightning network is probably an unplanned innovation, and allows it to become the security for a more general fast payment service,

We cannot be too sure. Satoshi left early, but he already had the idea of Bitcoin and off-chain transactions.

but this is still a form of banking.

How? There's no lending, and there's no debt. All Bitcoins in Lightning channels are Bitcoins.

The growth of the Lightning network is one of the things that should be contributing to a rise in price.

I believe Lightning is a long way off before making a meaningful impact. The halving will be the catalyst in my opinion.