Bitcoin price is clinging on to $18,000 after setting a new all-time high but failed to make it through psychological resistance at $20,000. Market participants are always searching for a reason for a trend change and often look to negative news or events that create FUD â€“ fear, uncertainty, and doubt.
And although 2020 has been the most bullish year yet for Bitcoin both in terms of a new record and a substantial shift in sentiment and acceptance, there are at least four major FUD-filled factors to be fearful of as a cryptocurrency investor. Hereâ€™s what to watch out for.
COULD THESE FOUR FUD FACTORS BE THE FIRST REAL THREAT TO BITCOIN?
In 2020, it is as ifÂ nothing can stop Bitcoin. Technical indicators have been screaming reversal for weeks, but the cryptocurrency has kept on trending.
But just as the young cryptocurrency network blossoms and enters its next major phase of growth, it is facing its most dangerous adversaries yet.Â Bitcoin is a little more than ten years old, and the challenges it faces, have been in power for decades, and potentially eons, while other challenges havenâ€™t fully arrived yet.
As if Bitcoin didnâ€™t have enough of an uphill battle facing normal market cycles where buyers and sellers dictate prices, while also continuing its advance in terms ofÂ global adoption as a technologyÂ and peer-to-peer network.
But because there are four FUD-filled factors surfacing that threaten the underlying technology itself, the assetâ€™s price could be particularly vulnerable.
UNITES STATES REGULATORY OVERREACH: HINDERING INNOVATION AND PUTTING AMERICA AT A DISADVANTAGE
The first and perhaps the most obvious challenge the young crypto asset is about to face is stern regulation coming from the US Treasury. Exiting Treasury Secretary Steven Mnuchin, who has spoken out in opposition against Bitcoin and its â€œillicit uses,â€ plans onÂ establishing regulations that outlaw â€œself-hostedâ€ wallets. Essentially, the US government wants all Bitcoin wallets to be under the control of a centralized exchange so, through that, the government can keep a watchful eye and seize funds if deemed necessary.
Removing Americanâ€™s ability to create self-hosted BTC wallets would detract from the cryptocurrencyâ€™s core value proposition and block critical design functionality. It also will â€“ as even Congress is pointing out â€“ lead to a lack of innovation in the States and put citizens at a great disadvantage globally.
CHINAâ€™S NEW QUANTUM COMPUTERS: COULD CRYPTOCURRENCY SECURITY BE BROKEN IN MINUTES?
The next substantial blow dealt to confidence in the cryptocurrencyâ€™s future, is the fact that engineers in China are claiming to have produced the worldâ€™s most powerful quantum computer. These futuristic computers crunch numbers at light speed, and could be used to make cryptography as useless a deterrent as a password rather than a secure way to transmit data or value.
For example, data suggests it would take a normal computer roughly 0.65 billion years to crack a single BTC wallet on the blockchain. The new computer China claims to have built, is said to have completed a task that would normally take 2.5 billion years in just minutes. At that rate, every Bitcoin wallet could be brute-forced in a matter of weeks with just one computer.
SOLAR FLARES: HOW THE SUN COULD STOP THE ASSET FROM MOONING FURTHER
Still, there is a chance that Bitcoin can fend off threats from the United States and China â€“ the two most powerful countries and governments in the world. But can the cryptocurrency overcomeÂ the potential threat posed by the Sun itself, an entity that science says is over 4.6 billion years old.
It is the center of our solar system, and necessary for most forms of life to exist. And it is currently hurling electromagnetic pulses toward the earth, that can disrupt communications and could even potentially have an impact on human behavior.
At the onset of the pandemic, Deutsche Bank warned that his scenario could happen, and assigned the scenario a higher probability than war or catastrophic volcanic eruptions.
â€œThere could be major power outages as electrical power grids are disrupted, which in turn would have knock-on effects throughout the economy as critical infrastructure is unable to be run properly. Lives could be lost if it impacted hospitals and medical care. Communications would be disrupted, many payment systems would be dysfunctional, and GPS [Global Positioning System] satellites would face extensive interference, to the detriment of all the individuals and industries that rely on accurate location services, not least aircraft.â€the report reads
Bitcoin would be rendered useless if the Sun decides to create a storm the size of the one that took place in 1859. Then, there was no internet, no major forms of communication or travel, so the impact wasnâ€™t as harmful. But today, such a storm could have catastrophic implications. In fact, the future of Bitcoin would be the very least of the worldâ€™s concerns.
Freakishly enough, the Sun over the last several days has decided to â€œwake upâ€ and has been ejecting waves of energy left and right. It has resulted in much of the world being able to view the Northern Lights or Aurora Borealis, which is typically only visible closer to the North Pole.
CAN BITCOIN CONQUER MT. GOX COINS FLOODING THE MARKET?
Finally, the thorn in the Lionâ€™s paw â€“Â Mt. Gox could come backÂ to take a massive bite out of Bitcoinâ€™s momentum. Mt. Gox has been a factor in Bitcoinâ€™s demise many times in the past, but so far the cryptocurrency has survived the hack itself in 2014, and the resulting selling from the trustee in custody of the BTC thatÂ kicked off the 2018 bear market.
At some point, the case turned into a civil rehabilitation plan, where 138K BTC are held and could be released to victims of the hack following the December 15, 2020 deadline â€“ a deadline that is just five days away.
The case has been kicked down the road time and time again, and this time could be no different. But in the off chance that these Bitcoins are released, many purchased below $1,000 â€“ there could be a mad dash to cash out while the price of Bitcoin is so high.
Any Mt. Gox coins would have been purchased or obtained prior to February 2014Â when the exchange locked down, and at a price maximum of under $1,200. At still over $17,000 in profit per coin, probabilities alone would suggest that at least some of the BTC would be sold at current prices.
Despite the demand, the sudden flood of supply could offset whatever equilibrium of buyers and sellers that has been tipped in the favor of a bull market, could be disrupted, and lead to a change in the assetâ€™s trend.
CONCLUSION: 2021 TO DECIDE THE FATE OF BLOCKCHAIN TECHNOLOGY
Few factors or FUD scenarios could cause such a dramatic change in the cryptocurrencyâ€™s future as the above. But for each of these bearish factors, donâ€™t forget that there areÂ equally bullish alternativesÂ that make the asset among the most potentially pivotal of all-time. Bitcoinâ€™s continued survival in the face of any and all adversaries is what time and time again shows that the technology has resilience, is robust enough to last, and is the revolution the world needs.
Out of lifeâ€™s school of war â€” What does not kill me makes me stronger. â€“ Friedrich Nietzsche