On February 21, 2021, the first ever Bitcoin cryptocurrency reached its all-time high, rising to $ 58,400. In 2017, a huge number of people called the cryptocurrency a bubble and a pyramid, the rapid growth caused mistrust and negativity. So what was and became bitcoin?
What has Bitcoin achieved?
Over the past 4 years, the cryptocurrency market has come a long way:
- the number of users has grown from 25 million to 100 million, according to research from the University of Cambridge. This is just under 2% of the world’s population, which indicates promising prospects for cryptocurrencies;
- most countries in the world, to one degree or another, have recognized cryptocurrencies and created laws regulating the digital industry, introduced taxation;
- leading economic powers create and prepare for the release of state cryptocurrencies (CBDC – Central Bank Digital Currency);
- investment funds and companies such as Grayscale, MicroStrategy and even Tesla Elon Musk began to invest billions in cryptocurrencies;
- the world’s largest investment funds, such as Fidelity Investments and BlackRock, which collectively manage more than $ 13 trillion, are also seriously thinking about investing in cryptocurrencies;
- the largest banks create special funds and platforms for investing in cryptocurrencies;
- Bitcoin futures and options are being added to the world’s leading exchanges.
Unlike 2017, today, Bitcoin is no longer considered a pyramid or a toy, but a quite serious asset that has found its application in the portfolios of investors, whether they are ordinary citizens or billionaires.
What is the application of bitcoin?
One of the main reasons for the popularity of Bitcoin in 2020/21 was the COVID-19 pandemic. The collapse of the global economy as a result of quarantine measures forced the world’s leading central banks to take unprecedented measures to rescue and support the economy by issuing trillions of dollars in unsecured money. Of course, this is reflected in the US dollar, which is depreciating against the leading world currencies. Zero interest rates attract people to take loans more often, making deposits is unprofitable, as well as investing in bonds, whose yield is practically zero. The only source of profit was the so-called risky assets: stock markets and cryptocurrencies. Stock markets, like cryptocurrencies, have provided investors with high returns, but if company shares are used as an investment asset, then Bitcoin and other cryptocurrencies are also used as a deflationary asset, which allows you to save capital from depreciation. In addition, bitcoin and other cryptocurrencies allow for much cheaper, safer and faster cross-border transfers of large capitals. An asset that allows, on such favorable terms, to transfer value literally from hand to hand, bypassing the banking system, is in high demand, which will only grow in the future.
Bitcoin is no longer a hype toy, but a quite attractive investment instrument, the growth potential of which, according to some analysts, is unlimited.