Bitcoin has crossed many barriers this year – starting from the $1000 mark in January this year to the $11000 mark a few days ago. In other words, after one year, Bitcoin is worth 12 times more. All these things make Bitcoin very attractive, but have you ever wondered what’s behind its popularity? Is this rapid increase real or is it just a bubble that is about to burst?
What makes Bitcoin so valuable?
Even though there is risk involved in investing in bitcoins, the truth is that there are a few things that could explain the value of this cryptocurrency. Namely, we still don’t know who made this cryptocurrency, but what is known for sure is that there is a specific number of bitcoins – 21 million to be more precise. So far, so-called “miners” were able to “dig” 16.7 millions of these coins. The average rate of creating is around 125 per 100 minutes.
So, this is a limited amount which is why the value will go up after some period of time. n other words, Bitcoin is like a virtual gold which is another limited resource. Another reason why Bitcoin is getting stronger is the increased involvement of serious investors in this field. More and more companies and banks are becoming aware of the true potential of this cryptocurrency.
A very volatile currency
Some people consider this to be an advantage while others disagree. Ever since Bitcoin was introduced in 2008 it had a few sudden drops and rises. For instance, two years after its introduction, Bitcoin increased by 30 times in just one month, but the priced dropped to its initial size by the end of the year. Something similar is happening this year, but all in all, the value of this currency is increasing rapidly. Those who are following the buy low, sell high strategy was able to make a lot of money thanks to Bitcoin.
Other things you should know about Bitcoin
Bitcoin is limited in terms of usage. There are ATMs in countries like Canada, but the fact is that only a small number of physical and online businesses accept bitcoins. The good news is that their number is growing. If you want to cash out Bitcoin remember that there is a fee involved. This fee can go up to $10 which means that making small transactions at the ATM is not a smart decision.
— Y&R South Africa (@YoungRubicamSA) 14 de diciembre de 2017