The escalating value of bitcoin has brought a revolution in the US market. All the huge investors and traders are investing in bitcoin and even common people are headed towards cryptocurrency investments. Cryptocurrencies are digital or virtual currency designed to work as a medium of exchange. It uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency.
Bitcoin is the top most valued cryptocurrency, and it has been creating quite a buzz. It was invented by an unknown person under the name of Satoshi Nakamoto and released as open-source software in 2009. Back then, these were cheap, and internet payments were not very popular, but today the internet has brought revolution to the payment system, and this has grown the demand and market for cryptocurrencies and other online payments. In February 2015, over 100,000 merchants and vendors accepted bitcoin as payment, and in 2017 the bitcoin and crypto market increased rapidly.
According to Forbes, 2017 will be remembered as the year of bitcoin. In the month of July, the price of a bitcoin was around $2,700, then the price escalated to around $19,200 and decreased to around $14,000 per bitcoin. Bitcoin is one of the top tree cryptocurrencies, with the other two being Ethereum and Bitcoin cash. The rates are changing every day, and the trade of bitcoin and other cryptocurrencies have become the top investment area. Since January 2017, crypto market capitalization has grown five times and reached $90 billion although it is banned in many countries. In those countries people have been arrested for the illegal trade of bitcoins. Here’s a chart of bitcoin’s price since 2009:
Bitcoin has revolutionized the payment system so you can carry millions of dollars where ever you go with the help of a small chip. No other monetary exchange tools can do that. Also, it is a fast and cheap medium to transfer money as other wire transfers charge exchange costs and transfer fees. This medium is not traceable, and the sources are not disclosed which reduces hacking and fraud of accounts. This can be taken as a positive as well as a negative. Also, online payments have become much easier through cryptocurrencies, especially through bitcoins, and most of the retailers have started accepting bitcoin payments which has reduced the trouble of carrying bulky wallets.
The negative side of bitcoin is generally regarding the economy. Bitcoin has been a medium for criminals to launder money. For instance, a person can simply transfer the money from one country to another with the purchase of bitcoin in the current valuation. So if people earning through illegal activities buy bitcoin in that country and travel to another country, s/he can simply cash out in that country by selling the bitcoins. This will adversely affect the nation’s economy. Similarly, the rapid changing of the valuation of the bitcoin is a matter of concern. If a merchant wants to accept cryptocurrency but cannot convert to the fiat currency immediately, this becomes a problem, for better or worse, as the bitcoin they accepted yesterday may not be worth the same today. So people accepting and selling bitcoin maybe profit or suffer a heavy loss.
After looking at the revolution of cryptocurrency, there are many predictions made by many experts and economists. Some state that the life span of bitcoin and other cryptocurrency is not long, and some predict that these currencies will have no value in the future.
Jim Cramer, the TV pundit, has the rosiest outlook on bitcoin, estimating a value of $1 million per coin. On the other hand, Roy Sebag, who runs the $2 billion Goldmoney fund, was once a bitcoin bull. But, according to Fortune, he sold most of his 17,000 coins last summer because he believes they will be worth nothing in the long-term. “It has completely devolved from the original promise,” he said. Experts predict that a year from now, the price of bitcoin could grow more than triple its record value. “Bitcoin can reach $60,000 by [December] 2018,” Mike Dumont, a senior editor for Bitcoin.com, told Futurism.
The prices have reached extreme highs, and people who are buying bitcoins at high prices have the risk of the crypto market crashing, potentially facing heavy losses, but also could reap the reward that the value may increase and they may earn higher return rates.
In my opinion, the availability of such markets has created the environment of trust, security and less skeptical investors, and in the future the market for cryptocurrencies will rise even more.