Early Bitcoin Buyer Provides Some Optimism for Crypto Traders
Bitcoin early buyer weighs in on where’s its bottom, and other issues related to the crypto.
Bitcoin traders saw its price fall below $8,000 Friday, which is the bottom predicted by Bitcoin guru Ran Neu-Ner.
As an early investor of Bitcoin, he’s earned a solid reputation for his predictions about Bitcoin’s price movements. He is also host of CNBC Africa’s Crypto Trader.
He spoke on Thursday evening about how the crypto could fall to as low as $7,500 before rebounding and climbing to as high as $20,000. He noted that Bitcoin is known for its wild price swings, and that what we are seeing now is typical of the crypto. He forced us to recall what happened toward the end of last year. To the hosts of CNBC’s Fast Money in New York, he said:
“Bitcoin goes up and Bitcoin goes down, and Bitcoin goes up and down very quickly. If you recall a few months ago I was sitting right here and Bitcoin was under $8,000 and then it shot up to $20,000 in less than two weeks.”
About the price movements, Neu-Ner noted that Bitcoin’s price can move down as much as 50% at a time. However, he said it’s quite a resilient currency, commodity asset that just keeps going up afterwards.
The bottom explained
One of the fascinating, and terrorizing things about Bitcoin is there seems to be no real method to its madness. Finance players often raise questions about how one can tell what spooked, or excited it to move down or up. So how can you determine its bottom?
Neu-Ner gave the following explanation for why he thinks the crypto’s bottom is $7,500.
“I can’t see it going much below $7,500 because there is a big uptake and there is a lot of retail money that has gone into it.”
For those who can’t tolerate the wild rides Bitcoin takes them on, and who are looking for a crypto that has more value, Neu-Ner points to Ethereum.
He gave kudos to Ethereum developers for their smarts and how they were using them to work and develop the Ethereum protocol.
“I would definitely be buying Ethereum now because [the developers] are some of the smartest people in the world.”
While its price can fluctuate as Bitcoin moves the entire crypto market, Ethereum has benefits that outshine Bitcoin. For example, Neu-Ner said Ethereum has more use cases than Bitcoin. Now, Bitcoin has only two use cases – currency or store of value. The Ethereum platform’s multiple uses include hedging, betting and voting.
Many Bitcoin observers wonder about Bitcoin’s use case as a currency. Neu-Ner explained it this way.
“Currently where Bitcoin is, Bitcoin’s not ready to be a currency. It’s not fast enough; it can’t scale enough; the blocks are too small; they kill themselves every 10 minutes. There are other Blockchains and other applications that have characteristics that are much more suitable to be a currency; to clear quicker. For one, Digibyte for example, clears every 15 seconds. But none of the Blockchains today are ready for the scale [needed for] real world currency transactions.”
Key to Bitcoin’s success
One of the reasons that Bitcoin hasn’t been more widely adopted relates to the difficulties the average consumer encounters when trying to buy it, Neu-Ner noted. However, changes are coming to facilitate the process, which will lead to more consumers buying Bitcoin.
He pointed to Robinhood, and it offering free Bitcoin trading, as an example of what’s needed to make it easier for the retail trader to start buying Bitcoin.
"I think 2018 is the year where the mechanisms to allow retail consumers to get into cryptocurrencies start to open themselves up. The price will become more stable."