The following guest post is courtesy of Marco Streng, CEO and Co-founder of Genesis Mining.
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If you have followed the Bitcoin industry over the past few years, you’ve seen all the ups and downs. From just a few pennies back in 2009 to over $1000 in 2014 and now to the mid $200’s where it has been for much of the year. One word can sum up the Bitcoin price: volatile.
The volatility of Bitcoin is one of the primary criticisms Bitcoin goes through every day in the media. They say something that changes so much cannot be trusted as a store of value. The truth is, they could be right. In its current growth phase, Bitcoin is very volatile.
What many do not realize is that this is entirely normal with an emerging technology. In fact, it is so common with these types of innovations that it has its own name. Consulting and research giant Gartner calls it the Hype Cycle.
Here is what the hype cycle looks like:
Look familiar? Starts off slow, skyrockets, drops, then begins to plateau?
Let’s look at Bitcoin prices over the past 2 years:
Perhaps, what is happening is exactly what is expected to happen. Many speculate that while the ups were great and the downs were devastating, we are now entering a period where the infrastructure is established and from here, it will slowly scale out.
While we are not about to predict the price, we do believe it’s quite clear that an infrastructure is being built. One of the largest signs of this is the fact that over $900 million has been invested into Bitcoin-related startups since 2012.
Only time will tell what happens next in the cycle. One thing is for sure though: it will be a fun ride!