Bitcoin price cycles may not be as consistent as some believe, according to two industry CEOs.
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Launched nearly 12 years ago, Bitcoin (BTC) is known for its often volatile market cycles.Though some feel that Bitcoin’s position as a store of value keeps these cycles fairly consistent, Rob Viglione, co-founder and CEO of Horizen, disagrees.
“The only consistent thing about Bitcoin and crypto markets is a large degree of uncertainty,” Viglione told Cointelegraph.“We’re witnessing, in real-time, the birth of an industry, the birth of a new monetary system, and the birth of a new peer-to-peer economy; creating a new world is messy business.”
Bitcoin is decentralized, borderless, and untied to any government.Holders can send and receive it quickly, as well as pseudonymously.
It also touts a finite maximum supply, listed publicly.Based on its code, the coin automatically decreases the amount of new Bitcoin entering the ecosystem every four years until the full supply has hit circulation.
Analyst PlanB built a stock-to-flow model projecting future prices for Bitcoin based on these halving events.Such a school of thought leaves room for some possible level of consistency for Bitcoin’s market cycles, at least logically.The human component of the equation, however, stirs the pot, creating uncertainty, according to Viglione.
“Sure, the Bitcoin money supply path is entirely prescribed from its genesis — everyone knows to a high degree of certainty exactly how much Bitcoin exists today and how much will exist tomorrow, but the demand side is entirely uncertain and swings wildly,” he posited.
“Uncertainty will naturally decrease with mass adoption and real-world utility, but it sure is exciting to be part of this industry in its infancy.”
MyEtherWallet CEO and founder, Kosala Hemachandra, does not see consistency in Bitcoin’s market cycles either.“We humans tend to see patterns especially in the trading world,” he said, subsequently labeling the tendency apophenia.
“That said, it is always reasonable to assume that there will be a rise in the price especially if the price of the supply goes down.This is due to simply demand for that asset staying the same while the asset supply halves.”
Bull cycles, for Bitcoin as well as other assets, can also play out as a result of other drivers, such as technological developments or popularity, Hemachandra explained.
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