Bitcoin price in 2017 has exhibited very dynamic behavior. Ever since conquering the $1,000 mark at the turn of the New Year, the volatility in the price of the cryptocurrency has increased significantly as represented by the huge swings being noticed very often.
Factors affecting Bitcoin
Incidentally, external factors which includes government intervention, industry competition, internal community disagreements among others have been responsible for both the rise and fall in Bitcoin price.
Certain developments which were expected to affect Bitcoin negatively have turned out to become catalysts in the propagation of the cryptocurrency. Some of these factors include actions by governments, criticism by acclaimed competitors, internal community debates among others.
Trading around $1,330 at the time of writing, certain predictions have surfaced which expect Bitcoin to hit the $2,000 mark in 2017.
Matthew Thompson of Coinigy thinks that there is a 50-50 chance of Bitcoin hitting the $2,000 mark in 2017. However, in his opinion, this depends on how the community shifts around it. He notes that while it is not a lie that Bitcoin along with the cryptocurrency market, in general, is steadily growing more popular, it has been plagued with a few issues that have hampered its usability as a currency.
According to Thompson, Ethereum and other cryptocurrencies/projects have slowly started to take away Bitcoin's majority market capitalization compared to the crypto market as a whole. He also notes that while Bitcoin has first mover advantage by a long shot, it has first mover disadvantage as well as it is relatively simple compared to newer projects.
Thompson also says:
“Bitcoin is suffering from a substantial amount of infighting in its community. Especially over the block size increase debate, supporters of potential solutions like Core and Unlimited are at a standstill for the time being.”
He adds: “With this conflict, Bitcoin is suffering from a lack of innovation which relates back to it losing its day-to-day usability as a legitimate currency and not just a store of a value. On top of this, whichever side does end up coming through, it is unsure as to how Bitcoin's price will be affected”.
The counteractive effect of ETF
Thompson continues by noting that Bitcoin has definitely gained more of a legitimate status as an investment. He says that traditional investment funds are starting to see it as a potential investment, and though the ETFs were rejected, the fact that they were even proposed says a lot about the space.
However, he reiterates that $2,000 price for Bitcoin in 2017 is 50-50 shot on whether Bitcoin goes beyond just the volatility seen in it. Bitcoin has very major things happening on both the positive and negative side.