Future of Bitcoin
What is “Bitcoin”?
The cryptocurrency that makes up the backbone of today's global economy, and the world's largest financial infrastructure.
For a limited time, on October 21st, 2017 (the " 21st" if you will), BTC remains the most popular crypto asset available with over 11 million market capitalization as of September 9th, 2017.
The blockchain ecosystem is still young at this point in history, though it has proven to be highly successful since the beginning. As such, there is much interest in understanding what the future of bitcoin looks like today from an investment standpoint. What can investors expect from the first bitcoin transaction? And could the future continue to look like this for many years to come? Or is it only just getting started? The short answer is that there is nothing set in stone yet. We may never know exactly what 2021 will hold for bitcoin, but we do know that BTC has long been considered the top digital asset class for its right. For these reasons, it's important to understand how well Bitcoin is performing to better understand where investors are placing their bets. Let's dive into everything that has happened, the pros and cons of each scenario, and the biggest question everyone is asking.
"What is “Bitcoin”?"
Bitcoin is a decentralized peer-to-peer network operating on blockchain technology. Bitcoin was developed by a non-profit organization known as the World Economic Forum( WEF). In doing so, the WEF plans to transform our entire world as we know it's going to be based on peer-to-peer principles. Bitcoin offers millions of users a fast, secure way to send money without the need for intermediaries such as banks or exchanges, which typically cost hundreds of dollars per payment. To ensure an even more seamless user experience, bitcoin's blockchain uses a simple consensus mechanism that automatically creates and validates transactions. Anyone who owns bitcoins (or other cryptocurrencies) as of Wednesday, September 19th, 2017, can now make use of one of the fastest-growing cryptocurrencies on the market. With bitcoin, both buyers and sellers can send funds to anyone within the network immediately.
As of April 1st, 2019 (when bitcoin began to regain its popularity), the price of bitcoin stood at around $3800 per bitcoin. The current bitcoin bull market that began in March of last year has seen the value of the coin skyrocket to more than $5,000 per bitcoin. That's almost doubled in less than three months. The prices have been trending upwards, not downward. This trend has put cryptocurrency investors in a very bullish mode and it's making a lot of people reconsider investing in BTC and other cryptos. So what is the future of bitcoin? Will investors see bitcoin reach the highs of previous years, or will it become the new meme stock from nowhere shortly? It's certainly possible, but the jury is still out on whether it is sustainable for all major financial sectors including banks and exchanges to keep Bitcoin active. Here is a list of some of the companies that have embraced bitcoin: Walmart, PayPal, Uber, Airbnb, LinkedIn, JPMorgan Chase, Google, Yahoo!, Twitter, Spotify, Disney+, Roku, Netflix, eBay, Dropbox, Coinbase, Instagram, Pinterest, Zoom, Lyft, Facebook, Microsoft, Tesla, Amazon, Apple, and more. As investors, what is your team waiting for in terms of potential bitcoin volatility? Do you know about any ETFs? If so, how did they perform in the past couple of months? How does the future look for bitcoin through 2025? Are there specific strategies that might help make bitcoin an ideal buy based on performance (including dividend yields)? Have you done your research? Are you looking at buying bitcoin? Please share with us your thoughts, ideas, and questions! Tell us why you think Bitcoin is here!
What Is A Cryptocurrency Now?
Bitcoin as a form of money, which would make sense if you could describe what being in a crypto market is like. There are multiple forms of money on Earth, but no real alternative to it. You don't go to an exchange or bank and ask them what their alternative looks like from a trading perspective because your bank might tell you that your bank doesn't have access to any kind of alternative currency. When I say you don't go to a bank to talk about money, I mean every day you do a Google search on how to get money out of a bank account, your bank tells you that you can't access cash directly there. The banking industry is monopolized by financial institutions. Most banks pay out dividends, but only 15% of the dividends. They pay dividends that range roughly equally across the country. Why is that? Because they want to earn more money when more people have more disposable income. But how do banks earn their money? By lending money to companies, which then use the funds to repack assets that the borrowers possess in a bid to repay loans made to the lender. Banks give loans to businesses and consumers alike. These loans are usually secured by assets held jointly, like securities or forex (which is a type of bond).
But is having these assets enough to support banks' ability to fund the growth of bitcoin? Probably not, right now. Financial systems like bonds and stocks are generally backed by assets that are owned individually by corporations, whereas companies are expected to collect assets as they grow. At present, there are no guarantees provided to the public that corporate assets like bonds and stocks will remain unharvested. Also, due to historically weak assets markets, investors may be unwilling to place large positions in inequities. Investors are also hesitant to invest heavily in equities, particularly at this juncture. Therefore, it's unlikely that stocks and bonds will end up becoming reliable investments in the coming days, especially with the uncertainty surrounding the economic prospects. While it remains unclear if the state of affairs currently facing companies holding huge stakes in the future (such as Wall Street, China, and Japan), it's probably too early to tell.
The next big issue that investors will be seeing a lot of action against companies that may be struggling to stay afloat is bitcoin mining. Mining is when a computer program uses computing power to mine bitcoin. This is when computers are permitted to mine the cryptocurrency. Without mining, then bitcoin is essentially worthless. Companies like AntPool, Bitmain, and Hash rate are working with companies like IBM and Microsoft to mine bitcoin (as cited in Forbes in November 2018). The goal is to increase the number of computing power so that miners can mine faster. In theory, this should result in increased efficiency and lower fees, but these claims vary from company to company. Some companies, such as those that offer services like cloud computing and data processing, have shown impressive efficiencies. Others, like the likes of Ethereum and Bitcoin Association, are far from as efficient as some companies claimed to be.
"Could the Future Look Like This? Can You Buy Bitcoin Today?"
The idea of bitcoin being able to provide investors some sort of hedge against inflation has sparked speculation. The belief is that higher rates of inflation could mean that investors may eventually turn bearish on bitcoin, resulting in selloffs. However, the reality on the ground is otherwise. Just like with the rise in demand for energy, there are some countries where the prices for crude oil have risen sharply. In South Africa, a rally that started back in December of 2017 lasted into 2020. In Europe, France and Germany, investors appear to be gearing towards bitcoin even after downgrading expectations that the future would be negative. Those gains were driven largely by surging oil demand. Even though crude and gold price have declined slightly over the same period, the value of bitcoin traded higher. As we approach the fall-off date in February and March of this year, investors can take comfort in knowing that both crude and gold prices are falling. Another factor for rising investor sentiment is the looming threat that inflation may derail bitcoin. Though the real reason for the uptick could be inflation, investors must consider the fact that there might be some additional trigger to sell off bitcoin in the future.
"Are There Specific Strategies That Might Help Make Bitcoin An Ideal Buy Based On Performance?"
If you're wondering what strategy might help boost bitcoin's performance, then let me give you my best guess as of now. All things considered, I'm telling you. Right now the key to profitability is staying away from speculative market plays. No investors are willing to bet against bitcoin. Despite high returns that haven't materialized yet, investors are always looking for ways to gain a greater appreciation of bitcoin. Traders are keeping tabs on Bitcoin and traders aren't shy about taking part in the cryptocurrency craze. After all, the return over the past five weeks of trading bitcoin on exchanges is 3 times the return on the first day of January of 2017. Trading bitcoin is a great solution for buyers wanting to capitalize on a new asset on the spot. Many financial professionals are already embracing bitcoin because of its consistent positive returns (see chart below). This type of trading is extremely profitable to the trader, but not all stocks and bonds have had the same success. Stocks and bonds yield, for example, didn't show any consistent upward trajectory over the past five weeks, which is why some investors may struggle to find buyers.