By Abu Bakr Shoaib
Your commercial awareness dose
Bitcoin is a cryptocurrency introduced in 2008 by Satoshi Nakamoto. The platform originally started in 2009 when it was implemented on open-source software. Bitcoin is operating without intermediaries or central banks and is a completely decentralized digital currency. The currency can be used for transaction purposes or person to person exchanges. Blockchain is used for the verification of transactions done through Bitcoin. Mining is the process of complex puzzles that creates Bitcoins.
Bitcoins can be used for the exchange of products, currencies, and services. Bitcoin is widely used as a medium for investment purposes. Bitcoin has faced much criticism from various economists such as illegal transactions, theft, price volatility, and heavy electricity used by miners. Some characterized it as a currency used for speculation purposes.
When Bitcoin first started in 2009 its valuation was $0.0008 for one coin. Its first real increase occurred in July 2010 when the valuation of one coin increased to $0.08 from $0.0008. Its first transaction happened in 2010 when a Bitcoin miner purchased two pizzas for 10000 Bitcoin in Florida. Bitcoin took off in 2013 when at the start of the year it was trading around $13.50 per coin. The worth of Bitcoin after a series of fluctuations was seen at $920 per coin in January 2014. In 2014 Bitcoin crashed again and was traded at $600 in July 2014.
At the beginning of 2015 Bitcoin fell to around $315. In 2015 Bitcoin again showed a volatile trend. In 2016 it gradually rose and crossed $1000 in early 2017. In October 2017 Bitcoin was trading at $5000 and in November of the same year, it reached $10000. In December 2017 it reached $19783. This massive increase was as a price bubble and many economists were starting to discourage it. In April 2018 it fall below $7000 and in November 2018 it crashed below $3500. Then again in mid of 2019, it spikes to $10000 and again fell back to $7000 at the end of 2019.
During the year 2020 Bitcoin has passed all its previous all-time highs (ATH). The interest around Bitcoin has increased enormously among private investors and institutions. The value rose from $7200 in January 2020 to $18353 in November 2020. This is an almost 155% increase in its worth. Bitcoin gets the status of a store of value during increasing inflation as a result of Covid-19. On December 30th Bitcoin pushed to over $28,500 which is a 224% year-to-year increase and a 500000% all-time history increase. Currently, more than 18.5 million Bitcoin are floating in the market and it has a market capitalization of over $428 billion.
Bitcoin is an all-time high since 2017 and will continue to skyrocket in the future. Bitcoin gets the advantage from the weaker dollar just like gold. Investors have more confidence in investing in Bitcoin than other securities as interest rates are falling in developed economies. There is a lot of stimulus happening in the world. Crypto trading firms are hopeful that devaluation of the currencies will further push the worth of Bitcoin higher.
In the early days of the Bitcoin launch, investors were less keen to invest in it but now they are increasingly viewing it as a viable alternative to paper currency. Even the giants of financial technology like PayPal are endorsing it as a viable mode of payment. Many investors are seeing it as a certain form of investment that is a shield against rising inflation and other financial turmoil.
There are many other reasons too for the unexpected rise in Bitcoin value such as media hype which has generated a lot of purchasing pressure and thus increase Bitcoin price. Bitcoin is adopted by big institutions like banks that are investing in it which is driving the price upward. Bitcoin supply is shortening due to scarcity and thus increasing its value. Digitalization has a major impact on the growth of cryptocurrencies. The spread of the internet has increased its popularity and people’s confidence in it is increasing thus Bitcoin demand and value are rising.
There are numerous rumours regarding Bitcoin prices in the future. According to the CEO of crypto-asset firm Galaxy Digital, Bitcoin could climb up to $60000 in 2021. According to the strategist at Citi, Bitcoin can soar up to $318000 by the end of 2021. Some economists predicted that Bitcoin may be floated on Nasdaq which will further enhance its credibility and its use as an alternative to conventional currencies will increase. With the increase in awareness and strong form market of cryptocurrency, its certainty will also increase in the future.
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