At least according to early adopters, the bitcoin selloff isn’t as worrisome as you may think.
The recent plunge in the price of bitcoin BTCUSD, +1.25% has social media and online forums debating whether a bottom is in sight.
The price of a single bitcoin is worth less than half it was in December and has lost 40% year-to-date. However, while the online conversations heat-up, to those bitcoin and blockchain trailblazers, the price of the No. 1 digital currency is a secondary thought.
Speaking at lavish retreats and conferences, industry pioneers are not talking about the day’s price rise and fall in the price of bitcoin. They are there to discuss a vision; one where blockchain and cryptocurrencies replace standard payment systems and record-keeping methods.
And with any asset, if the vision is there, the price really doesn’t matter.
“The real question is what the long-term story is. If they believe in the technology, the price is arbitrary,” said Thomas Flake, founder and chief marketing officer at bcause.
“It’s like a stock, if you think it’s going up you buy it, irrespective of the price.”
And for those experts tracking the price movements, the recent selloff is a reflection of true value of the digital currency.
“My experience is that the ‘smart money’ is actually more comfortable at these prices than at those of late 2017, and in many cases, savvy investors are waiting for prices to drop even lower before investing,” said Arianna Simpson, managing director at Autonomous Partners.
‘The price of bitcoin is not reflective of the amount of energy in the industry’
Surely someone has to be worried?
It’s the miners who are concerned about the price fluctuation, said Bob Fitzsimmons, head of Wedbush Futures.
There is a point where it makes no sense for miners to continue. The cost to mine a bitcoin is, for the most part, a constant (energy and input costs can slightly adjust the cost to mine a bitcoin). While a trader can deal with volatility, a miner has a line in the sand.
For Fitzsimmons, who recently attended a blockchain conference in Boca Raton, Fla., the notion that the price of bitcoin is a barometer for the industry is “quite the opposite.”
His main takeaway from the conference was the growing sentiment that the traditional buy-and-hold method of making money is being challenged by a new breed of investors and thinkers.
And as for the traders, they fall into two groups: the short-term, new money traders and the experienced ones. Much like the miners, the new money traders are holding their breath with every price update.
Jeff Koyen president of 360 Blockchain USA, believes Wall Street-type investors are easily spooked and have been panic-selling, whereas the experienced traders can ride it out. To them, “it’s just another bear market,” said Koyen.
“If you haven’t lived through a crypto winter before it’s easy to think bitcoin at zero is possible.”
Whatever the price, for some traders, the dial is always pointing to summer.