As with anything in life, there are no certainties and uncertainties in abundance. Over the past year, we have seen the price of Bitcoin flourish from strength to strength, currently sitting at an all-time high.
There is no denying that our current situations mean we live in exciting times that allow us to transfer and move assets and movements freely, making huge amounts of capital gains and losses.
Bitcoin was the first of its kind, a cryptocurrency that worked only electronically, unlike fiat currencies, which was built on an internet-based computer network known as the blockchain technology that is not controlled by a central governing body or entity. Its value grew as more investors became interested in it and today one Bitcoin is worth ~$48,000 (~£35,000).
Why is Bitcoin booming?
Truthfully, Bitcoin has not always been popular, this is natural for the market. Most investors are not comfortable with investing money into an asset in case it fails to deliver, and so, it takes years to build confidence. As demonstrated by the graph below, as Bitcoin’s popularity grew so did its value.
(Source: Boing Boing)
The value of an investment depends on its levels of supply and demand. The more people who are willing to buy Bitcoins means the price of them will increase and the more people selling means the price of them will decrease. Bitcoin is known as a ‘Bull Market’ trend which was designed to increase value over time.
For those specific reasons, many market analysts have argued that although Bitcoin is currently sitting at its all-time high, there’s much more scope for it, taking it further into a field, which is great news for investors. However, there have been many counter-arguments that argue the fact that what goes up must come down at some point, predicting a huge drop in value for Bitcoin.
There are however new movements in the market which could potentially make Bitcoin and other cryptocurrencies much more serious players, enabling them to grow much more into the areas we hadn’t expected.
Considering new features
Ability to be used in place of Fiat
For many, working, earning and investing has mostly been done with fiat currencies. Buying and selling stocks and shares has long been a working system for fiat. Even investing in precious metals like gold revolves around using fiat currencies. However, gaining the ability to buy and sell invested assets with cryptocurrencies, like Bitcoin, will create a new playground for investors. Being able to take an invested asset to invest in another asset could either work really well or go totally the opposite way.
Before this can be considered, however, the first hurdle would be to be able to buy physical goods with cryptocurrencies, which is something MasterCard is working on with their new card which will allow users to buy with crypto. For this reason. Some believe crypto has not reached its potential.
Used with smart technology to reduce hacking abilities
There is no denying that as most investments made and held online, there are big risks involved. The main when it comes to any cryptocurrency is the risk of hackers. However, as new technological advancements and sophisticated smartphones begin to take place and change our daily lives, there is much promise that future technological advancements will be able to prevent these types of risks, making investments in Bitcoin more secure. If this was to ever happen, the value of Bitcoin will surely go up as it will become increasingly protected and secure.
Decrease in complexity making them easier to use
(Image: Statista)
Cryptocurrencies have not always been so easy to access. For this reason, to begin with, not many were keen on the idea of investing in them. As Bitcoin and its peers become more accessible, they will naturally generate more of a following. Already, new smartphones like Samsung S21 are now developed with blockchain wallet capability. This helps to make investing in them much easier and more secure promoting investors.
There is much complexity surrounded with understanding how cryptocurrencies work. For Bitcoin to go above and beyond its current market situation, it will need to be less complex to invest in.
Fitting Into a widely divergent criteria
Bitcoin will also need to be an investment that all can make. This means fitting into the rules and policies of all countries and all natures of investments. Many argue that crypto will not be able to meet the same requirements as that of fiat and so there will need to be tighter regulations in its trading and investment forward.
