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While the Bitcoin market has had its ups and downs, what matters is that it is a major new technology that will disrupt the financial sector, and probably several others as well.
And that means Bitcoin should follow the same dramatic patterns as other disruptive technologies – which, so far, it has.
One chart was developed by research firm Gartner, Inc., and is known as the Gartner Hype Cycle. It's intended as a tool to help investors and business executives assess where an emerging technology stands so they can determine when the time is right to jump in.
Let's take a look at where the Bitcoin market fits in with the Gartner chart.
The technology trigger for Bitcoin was its invention in 2009, although the digital currency flew mostly under the radar of the mainstream media until last year.
We had a peak of inflated expectations last fall when the Bitcoin price spiked to over $1,100.
And Bitcoin also has suffered through the "trough of disillusionment." That's characterized by such events as negative press (for example, stories denouncing the Bitcoin market as a "bubble") and supplier consolidation and failures (like the bankruptcy of the Mt. Gox Bitcoin exchange).
But it's also characterized by an increase in venture capital funding, which is on pace to more than double in 2014 from last year.
So going by the Gartner chart, the Bitcoin market is either at the bottom of the trough or just coming out of it. A technology that reaches this stage is on the verge of a sustained period of rapid growth – the "slope of enlightenment."
Clearly, this is the ideal point to jump into a new technology – after the shake-out period when weak players fail, but well before it reaches the mass adoption stage.
And that brings us to the second chart, a bell curve that illustrates how quickly a new technology is adopted by the population – the "technology adoption rate."