31/07/2021
In Part 6 of the Bitcoin Fundamentals Series, we looked at whether Bitcoin was money, in Part 7 we looked at what bitcoin actual value.
When Bitcoin was first created as a result of Satoshi Nakamoto’s whitepaper and the mining of the Genesis block, the cryptocurrency was initially sold for 1c USD per 1 BTC.
Table of Contents
What is the current value of Bitcoin?
The price of Bitcoin has seen significant gains over the past three years, leading to intense media speculation and a hype that has done a lot to add an air of mystery and tension to digital currencies. In 2018, the Bitcoin price fell significantly and the token has consistently tried to find support and break resistance in the markets.
Where does the value of bitcoin come from?
The recent price spikes in Bitcoin could suggest that cryptocurrencies are a vacuum where new money appears to be “drawn” out of nowhere and investors can “get rich quick” by investing minimal amounts in Bitcoin and generating large returns.
However, this is not necessarily the case. Bitcoin’s value is determined by the investment and usage of its community and is determined by the distribution of new bitcoins in the market through the mining process.
How We In Is Bitcoin Money? studied, value is created primarily by the ability of each currency to function as a store of value, a medium of exchange, and a unit of account. In other words, if people around the world just stopped using the US dollar tomorrow and thought it was worthless, the value of that currency would go down because neither party wanted to own, trade or spend it.
Bitcoin price surge
Bitcoin saw its first big surge in 2011 when the cryptocurrency hit the value of around $ 1 to 1 BTC; At the time, media coverage of Bitcoin’s profits attracted new users, who accordingly spiked the price up to $ 30 per 1 BTC before a massive crash that dropped the value back to around $ 2.
Bitcoin has (arguably) experienced three major price increases. Usually, new investors buy Bitcoin (which means that the cryptocurrency gains in value with increasing importance in USD) with a planned exit strategy.
For example, an investor might have bought Bitcoin when the cryptocurrency was trading for $ 1 with the intention of selling when it hit $ 30 per coin. Ideally, the investor would have achieved a 30x return on their initial investment upon exit.
While this process has evolved in the past, media around the world have stepped in to explore the ups and downs of Bitcoin – the novelty of the cryptocurrency, the interesting technological foundation, and the willingness of investors to buy the cryptocurrency created something in the past that can be called a. can denote advertising price loop. This means that we can expect the value of the cryptocurrency to increase over time as Bitcoin becomes more “public” (or more accepted).
The value of Bitcoin is ultimately determined by its use. Since 2009, Bitcoin has apparently established itself as a form of “digital gold” where investors can buy stocks (bitcoins) and expect to sell them later for a profit once their respective values have risen.
However, as a peer-to-peer currency network, Bitcoin could benefit the most when used as a conventional currency to purchase goods or services. In recent years, large corporations like Microsoft and PayPal have adopted Bitcoin as a means of payment – which means that once the cryptocurrency becomes an accepted medium of exchange, it may amass far greater values or “values”.
What will the future value of Bitcoin be?
Investors and experts around the world have pondered what the ultimate value of Bitcoin will be. Simply put, there may not be a reliable value that we can determine.
Bitcoin’s nature as a peer-to-peer currency network, based on cryptography, traditionally classifies it as a speculative investment. Basically, it will likely be up to investors, governments, and institutions around the world to determine the ultimate value of Bitcoin by signaling their intention to buy or use the currency.
Bitcoin has tremendous potential to serve as a decentralized global network that allows parties to process and settle payments in an average of less than fifteen minutes. The fact that Bitcoin waives the influence of governments or central banks means that it doesn’t necessarily face the same political or environmental pressures that could determine the value of fiat currencies or precious metals like gold.
The value of the Bitcoin consensus
Rather, the value of Bitcoin is essentially determined by consensus – the agreement of parties around the world to adopt Bitcoin as a store of value and a medium of exchange will ultimately define what value each has bitcoin owns.
Many people around the world have their own perspective. Billionaire investors like John McAfee have publicly expressed their belief that a bitcoin will be worth $ 1 million by the end of 2020. Others, like Warren Buffet, have argued that Bitcoin is just a bubble and will have no value in significant sums in the near future.
In between, individual investors will also develop their own exit strategies in which they are ready to leave the market and “bank” all profits from their investments.
These aspects along with the continued promotion over time will ultimately determine the future value of the company. determine bitcoin because people all over the world are either adopting cryptocurrency as the new standard or foregoing it altogether in favor of another cryptocurrency, established fiat currencies or precious metals.
Will Bitcoin Fail?
Hypothetically, we can see scenarios in the future in which the value of Bitcoin fizzles out and its value is forgotten, in which the cryptocurrency becomes a “rand” currency that is used together with other fiat currencies, or in which parties on the across the world are adopting Bitcoin as the new global payment standard.
Currently, the major determinants of Bitcoin’s value in the near future will be the willingness of parties to accept the cryptocurrency as a means of payment and the willingness of institutions, central banks and governments to either invest in it or accept its use.
In part eight of our Bitcoin Fundamentals series, we examine how to buy or sell Bitcoin.
How much is a Bitcoin worth? first appeared on Coin Insider.
Relevant news
Bitcoin Basics: The phenomenon explained in plain english
You may have heard of Bitcoin on the news, from a friend, or even in…
How can I buy and sell Bitcoin?
In Part 7 of the Bitcoin Fundamentals Series, we looked at how much Bitcoin is…
What is a reverse ICO?
As already mentioned, Initial Coin Offerings, commonly abbreviated as ICOs, are a fundraising method using…
What is an ICO bounty program?
The concept of a bounty program appears repeatedly in Initial Coin Offering (ICO) projects. Even…
How can I store Bitcoin?
In Part 8 of the Bitcoin Basics Series, we looked at how to buy and…
Why should I invest in Bitcoin?
Part 9 of the Bitcoin Fundamentals Series was about how to store your cryptocurrency. In…
Be the first to comment