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Bitcoin: This could be the best year so far

Tuur Demeester (author of the original English article) is an independent investor and editor-in-chief of Adamant Research. Adamant Research was founded in early 2015 and offers a monthly newsletter service. Here you can find a report about “How do I position myself in the Bitcoin Rally”.

2015 was another “roller coaster year” for Bitcoin news

There was a remarkable development in infrastructure, hot debates about scalability and many companies and institutions that came to the Bitcoin news. In addition, there was a small crash below the 150 US dollar mark, which was quickly compensated by a rapid upswing to 500 US dollars. Let’s first look back at the highs and lows of the past Bitcoin news and then discuss what the year 2016 will bring us.

Here is my view of the history of Bitcoin formula:

2009-2010: Conception
This is the prehistory of Bitcoin formula as a currency in which there was hardly a price for the tokens created by software. There were numerous technical discussions and the core developers plugged a big weakness in the Bitcoin formula source code.

2011: The first bubble and great joy in experimentation

The first Bitcoin exchanges fought for new users and the Bitcoin exchange Mt Gox emerged as the clear winner of the battle. Silk Road and BitPay are founded and Bitcoin experiences its first bubble with a jump from $1 to $30.

2012: Gambling, Speculation and Leverages
At the beginning of the year there were some big Bitcoin thefts and the market demanded better and safer Bitcoin wallets.

The lack of interest in the Bitcoin prize was offset by leverage (Bitcoinica), gambling (Satoshi Dice), various Altcoins (Litecoin) and Bitcoin Mining (Butterfly Labs).

2013: The Mining Boom
After several Bitcoin death advertisements in well-known newspapers, Bitcoin returned with a full rally in spring.

News of huge profits from early entrants caused a sensation and the mining boom was not long in coming due to the development of hardware specifically designed for mining.

The boom was underpinned by further gains in the last two months of the year as the price of a BTC jumped to over $1,000 an ounce. Mining difficulty rose from 20 to 90,000 Th/s this year.

2014: Altcoin side jumps
Given the enormous potential of the digital currency, more than $300 million has already been invested in Bitcoin start-ups in 2014 – four times as high as last year.

But not all sectors of the Bitcoin business were doing so well: speculative exuberance, overzealous mining-hardware manufacturers and the ever-increasing difficulty made Bitcoin mining fly. The results were delivery cancellations, deliveries of no longer profitable hardware and a number of insolvent start-ups (Tuur Demeester also burned some money here).

In view of the falling Bitcoin price and mining overcapacity, initial suspicions were spread that Bitcoin was too rigid, that a boring brand embodied the mining network too inefficient.

In response, Altcoins mushroomed like mushrooms that supposedly could fix all these problems…or made no promises at all, such as Dogecoin. Bitcoin investors jumped on the bandwagon of Altcoins to diversify their portfolio and minimize their risk. For some it will have been the right decision because in 2014 there were several Altcoin bubbles.

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