Bitcoin is looking more attractive to potential investors particularly those who have had some disappointments using traditional forms of investments such as in the stock market or gold market.
Investments in the digital currency have more than doubled in the past twelve months. According to CoinMarketCap, one bitcoin was worth about $230 around September 2015. Compared to its current rate of about $580 (as at the time of this writing), it has attained an increase of more than 150% in value.
The price of bitcoin has fluctuated wildly since it was launched in 2009. In 2010, two pizzas were bought for 10,000 bitcoin. Three years later, one bitcoin was worth $1,000 in value.
It has also been through several ups and downs such as hacking controversies. In 2014, it was Mt Gox. Earlier this month, Hong Kong-based Bitfinex exchanged was hacked and bitcoins worth about $78m were stolen causing a 20% drop in the value of the currency.
Such drop or controversies have not stopped people from going digital with their money, using Bitcoin the paperless, bankless, and stateless currency which exists on computers.
It’s been profitable for many who invested in it even as confidence in the cryptocurrency has been building with more companies such as Dell, Tesla and Microsoft now accept it as a form of payment.
However, following the cryptocurrency lead has been debatable for some reasons especially for new users.
According to a Guardian article, the list of firms accepting Bitcoin is growing to include such as CheapAir.com and Britain’s first bitcoin pub, The Pembury Tavern in Hackney, London, where a pint of Milton Pegasus costs £3.70 or 0.0084 bitcoin.
The article cites Lex Deak, chief executive of alternative investment aggregator Off3r, as saying that investing in the cryptocurrency isn’t for the fainthearted. “You should only invest a small proportion of your money and be prepared for massive swings in value.” He added that the early gold rush days are over and buyers shouldn’t treat it as a get-rich-quick scheme. “You could double your money within a year, but you could easily lose it all,” he says.
Marc Warne, the founder of Bittylicious, a site where bitcoins can be bought, says the same to start with a small amount to begin with.
As bitcoin has a 21 million finite supply, Warne says future price movement will depend on demand adding that Bitcoin will be used more in the future because it’s the first time that something not fully controlled by any entity like a government or bank has been used over the internet.
For Dave Hrycyszyn of digital agency Head, which advises companies on new technologies, while the lack of Bitcoin regulation appeals to some, it also means it has none of the stability mechanisms typically associated with a currency which can make it volatile.
Featured image from Shutterstock.
Last modified: July 13, 2020 3:14 AM UTC