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During the wild 2020 and 2021 years, the riskiest assets were the hottest: cryptocurrencies! This trend has remained the strongest in the past two years despite the extreme controversy between the crypto bulls and bitcoin haters. The first group says that cryptocurrencies will substitute for gold in the near future, while the second team has a pessimistic look to decentralization technology. They think that all digital currencies’ recent successes are bubbles ready to burst and don’t offer a solid market opportunity.
Although this belief may seem like a piece of advice from your 90-year-old grandfather, it is realistic from a “materialist” perspective. “Material” money has created the contemporary world in which we live now, and it represents everything around us from cheap bread loaves to luxury cars. The smell of money makes us happy, its images make us shudder, and its presence in our wallets makes us more confident. After all, it makes sense to tell you that money has become intangible!
Even now, there are many developed countries that are not fond of banking cards, web wallets, and other cash-based payment options, such as Germany. Although cryptocurrency has become widely accepted among many users in many countries and involved in many new technological industries, it has not achieved a dominant trend yet! In other words, it’s safe to say that cryptocurrencies have come well underway in the investing field, but they have not gone the same distance in use! This is the reason behind the heated debate between the naysayers and crypto enthusiasts.
Bitcoin carnage: a great opportunity or a bubble ready to burst
After an unprecedented rise and rapid crash three years ago, Bitcoin is back at historical levels again. Like last time, a surge of investors’ passion is driving coins to their all-time highs. Bitcoin bulls say this is only the beginning!
About investors crypto fever, WSJ Markets Reporter, Paul Vigna, commented: “They see cryptocurrencies as a substitute for the current suck financial systems, they have pushed this financial innovation for 11 years, and finally they now reap what they sowed for this long period … Without the huge venture capital they put into cryptocurrencies we might never have known about these coins!”
On the other side, many average investors follow the Bitcoin curve for an extended period and find that this asset is too volatile for them. Furthermore, future Bitcoin prices cannot be predicted, and this is a purely speculative bet that won’t be able to scale! What is more ironic is that some betting sites offer bets on crypto prices in the new year! Gamblingpro.pro is one of the best non Gamstop online casino and betting platforms.
How Bitcoin Works?
The way that Bitcoin and its digital cousins’ work is the key to understanding why they are so popular among technology companies, businessmen, average investors, and even regular folk.
First of all, digital currencies aren’t tight to any physical asset like real estate, gold, oil, or fiat currencies. At their core, virtual currencies are software run in an independent centralized network consisting of a large number of interlinked computers spread around the world. The purpose of all altcoins is to allow 2 persons to exchange values directly without interfering with any other third party or controlling a central party in this network.
The crypto interlinked computers form a ledger of transactions across the world. Immediately after the completion of the transaction, its data will be copied on every computer on this network.
Every time the user makes a new transaction, a digital signature is added to the ledger for verification which cannot be changed after the transaction complementation. So, any user cannot counterfeit Bitcoin.
What does this mean? All crypto transactions can be seen and reviewed by anybody. Although that blockchain technology cancels the anonymity feature, it prevents counterfeiting, transactions duplication, and double-spending. In other terms, blockchain is an honest network that makes cryptocurrencies secure, unhackable, and fulfil legal requirements.
10 Reasons behind the cryptocurrency investment fever
1. Bitcoins number is predetermined
Although some beginner investors in cryptocurrencies think that Bitcoin units can be limitless and this can create pic Inflation Levels, this is not true at all! Bitcoins that aren’t yet available to the public are made through a process known as “mining” in which miners utilize powerful computers to solve complex algorithms and unlock new bitcoins. This process consumes tremendous electrical energy. In addition, the bitcoin founding key was embedded with the condition that there would be a limited number of coins. This scarcity gives bitcoin value and prevents it from any inflation.
2. As the number of available bitcoin is growing, the demand grows faster
It is self-evident based on the supply and demand law. At the current time, Investors’ appetite for cryptocurrencies is at an all-time high, and, therefore, cryptocurrencies are becoming easier to buy on apps like PayPal, Square, and Robinhood. This trend draws more novice investors who are looking for one-person easy investment and quick returns. For instance, in 2020 alone, there were more than 38 million small trades less than $1,000, while in 2017, small transfers total amounted to $20 million only.
3. Central banks start to digitise their own currencies
Savvy investors got it very early: The mobile bank app on your smartphone will end up managing virtual currencies transactions! Actually, the digital financial systems are based on “digitizing” fiat currencies, and as financial systems become more digital it is leading bitcoin to become more mainstream. The main challenge facing banks’ recognition of blockchain technology is that central banks manipulate national currencies to fit the surrounding conditions, so Bitcoin became a hedge against the dollar. That means when the dollar price goes down, the demand for Bitcoin will increase, and its price should go up!
4. Asset with a significant return
Undoubtedly, the highest returned asset in the capital market is Bitcoin! All investors don’t care about risks, their eyes are on huge returns only. In 2021, Bitcoin was up at 220%.
5. Cryptocurrencies market is small
That’s why investing in coins is very risky and has the potential for significant returns. The total value of Bitcoin and circulation is about $420 billion, while the apple stock is $2 trillion, while the value of the gold financial market is $12 trillion. So, as we hinted above, bitcoin and other coins haven’t created a mainstream trend yet among both investors and users. The bitcoin market is still very tiny, and the smallness of the market contributes to these explosive price moves!
6. No insurance backing it
Since the cryptocurrencies are decentralized, they have no circuit breakers! For instance, if tomorrow the price of Bitcoin against the dollar hits zero, there will be nothing to stop it.
7. The Bitcoin craze will continue!
Until the market matures or miners reach the finite number of coins, the Bitcoin price will see volatile swings. So, is it risky? Yes, but also profitable!
8. Retain the value for the long term under all circumstances
No authority can control cryptocurrency networks because blockchain technology is based on millions of supercomputers around the world, work 24/7, and consume large amounts of energy. Thanks to this technology, cryptocurrencies are self-protected from governments and central authorities. Furthermore, they are not linked to any other assets and are not subject to regulations. In other words, digital currencies can protect themselves from bank disasters, hyperinflation, and other economic problems. In other words, if the financial system collapses, cryptocurrencies will not be affected!
9. Zero or low fees
Banks charge companies exorbitant fees for large and frequent transfers. On the other hand, crypto wallets get zero or approximately zero fees. It is quite understandable as these companies need to pay employees’ salaries, utility bills, purchase raw materials and other supplies. When deducting 1% on each transaction, this percentage will become a fortune by the end of the year, let alone if it is 3% or 5%! When using Bitcoin or any of its grandsons, transfers are made at very low fees, and that’s why companies prefer these virtual currencies more.
10. Invite new customers
A large segment of customers wants to make their payments with cryptocurrency. As a result, many major retailers accept digital currencies such as Microsoft, Xbox, Overstock, and Starbucks. According to a report, 40% of new customers prefer to pay in crypto.
Thanks For Providing the information. This is a very nice post and has great information. Kosovo police seize 300 crypto mining machines amid electrical energy shortages
The police in Kosovo have ramped up their efforts to crack down on crypto miners within the nation, confiscating greater than 300 mining machines on Jan. 8 alone.
An announcement issued by the Kosovo police on Jan. 8 revealed that it had seized 272 “Antminer” Bitcoin mining machines within the municipality of Leposavic, and one other 39 mining machines close to Prishtina.
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