What’s happening to the price of Bitcoin (BTC)?
From an all-time high of just under 64,000 USD to—at the time of writing—the 33,000-35,000 USD mark, it’s safe to say that BTC’s price has seen some swings over the past few months.
With more online merchants beginning to accept it, Bitcoin is moving across the Internet as fast as ever. Yet, many of it is being converted to fiat. In essence, BTC is flooding exchanges and it could be one of the reasons its price is going down.
Compare BTC’s current situation to a living body that’s losing pressure. Blood doesn’t stay in our arms after it comes from the heart. If it did, our arms would probably swell up. The blood needs to keep flowing throughout our body. This same thing could be happening with Bitcoin.
For the system to thrive, the “blood” needs to flow in a circle—a linear flow will always result in leakage. To keep BTC’s network from “swelling up,” we’ll need to close the loop. If digital money keeps being converted into traditional fiat currencies, can we even consider BTC as a currency? This is the linear leak that we’re in, and the solution is to close that circle.
Focusing on local communities
As even more online merchants begin to take Bitcoin for what it is—an online currency that transcends borders—they might have the opportunity to close the circle. On the other hand, bigger companies might have a harder time closing this circle since their networks are more extensive and it’ll be more challenging to convince everyone to deal in Bitcoin. This is why it’s much better to keep our focus on local communities.
For example, local bakeries, cafes, and farmers are much better candidates for closing the circle. With what we’ve seen so far in the crypto space, it’s far more likely that these players would be more open to dealing in BTC. In this scenario, everyone could exchange their goods for Bitcoin. Farmers supply coffee beans and flour to the bakeries and cafes and get paid in BTC. In return, they could repurchase brewed coffee and baked goods with Bitcoin. This is what a closed circle looks like and this is what needs to happen if we want BTC’s price to rise again.
Closing the loop
If we can close the circle in our local communities, it’s possible that we’ll see a tremendous spike in cryptocurrency growth. Eventually, these communities will begin to connect via the Internet. Soon enough, second-tier suppliers on the Internet will follow as the pressure to accept BTC rises from not only their online customers but from their retail customers as well. Once that happens, the third-tier heavy industries will follow and adoption will be on the horizon.
The key to kicking this thing off is to focus on local merchants and retail markets. When they realize that there wouldn’t even be a need to convert their BTC into traditional fiat, the transformation will begin. When that time comes, who knows? Bitcoin at 100,000 USD could be more realistic than you think.