After a painful 2014, Bitcoin is eager for a bright year

The price of Bitcoin surpassed $1,000 in the second half of 2013, but has continued to fall this year. After an optimistic wave, the current price range of Bitcoin is around $350, and it seems difficult to shake.

It now appears that the days of skyrocketing Bitcoin stock prices are gone forever.

Our memories

For the past 10 years, we have been "babies in the Bitcoin forest", and various speculations about cryptocurrencies have jointly shaped the "legend" of Bitcoin.

Stories of people getting rich overnight through Bitcoin are common. The price of Bitcoin has risen sharply, and many people regret not investing in Bitcoin when it was only $13 at the end of 2012. As owners of a Bitcoin ETF fund, the Winklevoss brothers predict that the price of Bitcoin will rise to $40,000 in the future, which means that the total value of all Bitcoins will reach $400 billion.

WordPress began accepting Bitcoin payments in late 2012. Dell, Overstock.com, and other companies also began supporting the virtual currency, though some chose to work with partners. Startups and accelerators began focusing on the Bitcoin ecosystem. One man and his wife chose to live entirely on Bitcoin within three months of their marriage.

However, this situation did not last long.

Current situation

Investors currently seem to be unclear about how to operate Bitcoin. A common view is that a single Bitcoin is valuable, but Bitcoin does not have much short-term potential for new users. This directly means that Bitcoin will not face much buying pressure in the short term.

Overall, the number of Bitcoin wallets created by users is growing. This shows that potential buyers are still interested in Bitcoin. Bitcoin wallets are files that store keys that can be unlocked by tools, and Bitcoin can only be used for spending after being unlocked. This is similar to a physical wallet that stores credit cards.

As of the end of the third quarter, there were 6.5 million bitcoin wallets in existence, up from 1.3 million in the same period last year. But most of those wallets are empty, according to data obtained by Reuters. Industry insiders estimate that there are only 250,000 to 500,000 bitcoin wallets that hold bitcoins. In other words, many people have signed up for bitcoin wallets but haven't bought any. The process is becoming less complicated as more user-friendly tools are available. Still, withdrawing bitcoins from a bitcoin wallet is more cumbersome than regular withdrawals.

In addition, investors and the media have also noticed that Bitcoin is one of the worst investments this year in terms of price decline. However, this situation has not scared off true Bitcoin believers. It is worth noting that the topic discussed in the Bitcoin industry is more about the underlying technology, namely the blockchain, rather than the price of Bitcoin.

Of course, if it is to be a value transfer tool, some kind of pricing mechanism is still necessary, so the price is also meaningful.

"I think as an asset, Bitcoin will still have the best performance in the next two years," said Adam Draper, founder of Bitcoin startup accelerator Boost VC. "We are in repair mode, speculation on Bitcoin is decreasing, and people are exploring the real use of Bitcoin."

Draper is the son of venture capitalist Tim Draper, and like his son, the elder Draper is one of the most staunch supporters of Bitcoin.

For Bitcoin, a rise in price will drive the entire market. No matter which part of the Bitcoin ecosystem you think is the most important, attracting the interest of ordinary people can't be a bad thing. Therefore, if the price of Bitcoin does not rise in 2015, then the application scenarios of Bitcoin will not develop much.

Microsoft recently started accepting Bitcoin payments, choosing to partner with Bitpay. The decision by the world’s second-largest company by market value to accept Bitcoin did not drive up the price of Bitcoin. Therefore, it seems that more companies accepting Bitcoin payments will not have much impact on the price of Bitcoin.

The past and future of cryptocurrency

If you expect the price of Bitcoin to rise in 2015, then you need to ask yourself what event, or series of events, would bring about that effect.

Adam Draper believes that such an impact will come from the launch of certain products, especially those related to blockchain, which will make cryptocurrency technology more accessible to more people. "I am still crazy bullish on Bitcoin, and the next 6 months will be exciting." He told TechCrunch.

Draper's accelerator invests in 20 to 30 companies twice a year. Recently, Boost's focus is shifting to Bitcoin startups. Draper's goal is to help 100 Bitcoin-centric entrepreneurs by 2017. "Genius entrepreneurs come to this field, launch excellent products, and bring real value to the world," Draper said.

Bitcoin is currently trading at its lowest point of the year, consuming much of the value it had previously created. Draper and other Bitcoin supporters are still holding on. Similar to the emergence of the bubble, this year's bursting of the bubble has also had a huge impact.

We are still confused about virtual currencies.