An open letter to the Bitcoin community by Jörg von Minckwitz

I have been in the crypto economy since the very early days. This was back in 2011 and since then I got to know the ups and downs of the market. I have seen the market crash from over $10 to almost zero, from $100 to under $10 and so on. On Monday morning, as I have always done for the last 6+ years, I was shocked after checking the Bitcoin price. The first thing that came to mind was: This is the end.

It took me a few hours to remind myself that I have been through this more times than I can remember or possibly count. The MtGox closure, “Bitcoin got hacked”, China banning Bitcoin mining, JP Morgan CEO calling Bitcoin “a fraud”, Bitcoin is only for money laundering and many more.

What scares me this time is that there are other players in the game now. In the early days, when the word hodl was more or less born, I had contact with most of the major players and actors in the space and there was always one thing that we all agreed on: We want to change the world. So we fastened our seatbelts and went on the fun and thrilling crypto ride together.

It is the end of an era for me. I say this because, for many in the crypto space, bitcoin and other cryptos are no longer about changing the world – it became a way to make more (and fast) money. That is one of the reasons why people tend to panic and sell – People are afraid of losing money.

In my humble opinion, this is not how bitcoin should be treated. Bitcoin is the biggest experiment in the world so far and it has the potential to change the world as we know it forever. It is not, nor was it designed to be, a tool to get rich quickly.

Read more: Bitwala

Despite a sharp price recovery to over $11,500 today, bitcoin’s bulls are not out of the woods yet, the price charts suggest.

Coindesk’s Bitcoin Price Index (BPI) has climbed 25.9 percent from the eight-week low of $9,199.59 hit yesterday at 15:44 UTC. As of writing, bitcoin (BTC) is trading at $11,590 levels.

The world’s largest cryptocurrency by market capitalization has appreciated by 8 percent in the last 24 hours, according to data source OnChainFX.

However, the investor community isn’t convinced by the move, and comments on social media show that some believe the overnight recovery is nothing more than a “dead cat bounce.”

The price chart analysis indicates that only a close (as per UTC) above $12,500 (prices as per Coinbase) would add credence to rebound from sub-100-day moving average (MA) levels and confirm that a short-term bottom is in place.

Read more: CoinDesk

A second day of losses throughout cryptocurrency markets is giving would-be traders a chance to buy that may not be repeated.

Bitcoin dropped below $10,000 on Cointelegraph’s price index Wednesday, Jan. 17. On the same day, Ethereum (ETH) went below $900, marking a price slide of over 30% for both assets this week.

Community and industry figures have reacted with mixed emotions to the downturn, which mimics behavior seen in January over the past three years.

Read more: CoinTelegraph

Bitcoin’s price has been on a wild ride since its inception.

2017 alone saw massive gains, starting the year at under $1,000 and, at its peak, breaking $19,000, according to industry site CoinDesk.

On Tuesday, it was trading at $11,943, a decline of 12 percent, according to CoinDesk.

As bitcoin’s popularity surges and its price rises and falls, more and more people are asking the same question: How does bitcoin, something that’s essentially invisible and intangible, have value?

Scarcity and utility

In economics, something has value if it checks the following two boxes: scarcity and utility. Scarcity just means that something has a finite supply. In the case of bitcoin, the cryptocurrency has a set cap of 21 million bitcoins.

Many analysts note that this set cap makes bitcoin more desirable than other assets, even gold. That’s because unlike with gold, there’s no need to worry about a digital Gold Rush. A treasure trove of bitcoin won’t ever be “discovered,” causing the crypto’s price to crash with an influx in supply.

“There are potentially millions of times more gold underground than actually has been extracted,”

said Tom Lee, head of research at Fundstrat Global Advisors. Lee was chief equity strategist at J.P. Morgan before co-founding Fundstrat in 2014.

Read more: CNBC