Bitcoin has been popping up in the news ever since its initial launch back in 2008.
The cryptocurrency’s price has since been multiplied by over 4,000,000, going from under $0.0025 to over $10,000 — where it sits today. There isn’t a soul in the world that doesn’t wish to have jumped on the bandwagon back when it was under one cent a piece.
The Bitcoin trend has shaken the investment world at the core, but will it stick?
In this article, we’ll analyse the main factors deciding that, as well as whether you should hop on and invest today!
The History Of Bitcoin’s Price
Back in 2008, Satoshi Nakamoto published a white paper titled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’, which later became the foundation of Bitcoin.
As the world’s first cryptocurrency, it started modestly. The first recorded purchase with BTC was two large pizzas, for a total of 10,000BTC — worth over $100 million today.
At some point in 2011, Bitcoin achieved parity with the US dollar, and more cryptocurrencies were springing up.
A few years later, in 2017, Bitcoin’s value was skyrocketing up to a value of almost $20,000 per piece. At the same time, over 1,000 cryptocurrencies were counted on Coinmarketcap.com — the biggest data aggregator in the cryptocurrency space.
Many investors took the fall that followed in 2018 and early 2019, as Bitcoin slid under $4,000. However, since then, Bitcoin has risen again, currently sitting at a bit over $10,000.
Is Bitcoin Too Volatile To Stay?
‘Unstable’ is a word I hear to describe Bitcoin often.
Many old-school investors judge Bitcoin for being too volatile. What they seem to be missing is that this volatility is due to its recent existence — and what made it such an excellent investment in the first place.
Cryptocurrency, at least right now, is a bit of a misnomer. Bitcoin is less of a way of transferring value (even though that has its advantages as a currency) and more of an investible good, much like a stock, or gold.
And due to the potential gains, as well as its practical benefits, some of the biggest names in investing have begun considering it strongly. In fact, Bitcoin has even been regarded as a better long-term investment than gold by many of them.
Bitcoin, Too Risky?
We’ve all heard about investors losing all of their Bitcoin due to security breaches on cryptocurrency exchanges. These losses sometimes amounted to multiple millions of US dollars.
This is a downside of Bitcoin. After all, who would trust an entirely-online avenue of payment?
Think about PayPal. It’s an entirely online way of transferring value — and it can get hacked too. The major difference is that Bitcoin is newer, and therefore, cryptocurrency exchanges don’t have all the anti-hacking measures that PayPal built over time.
On the other hand, the cryptocurrency industry learns fast, and Bitcoin is safer than it ever was. While the risk of getting hacked is still very real, it will become more and more improbable as we move forward in time.
Should I Buy Bitcoin?
Buying Bitcoin has many pros and cons. So, should you?
CryptoManiaks wrote an extensive answer to this question. Still, here are some pros and cons to help you make your decision.
Pros of buying Bitcoin
- You’ll be an early adopter of Bitcoin and stay ahead of new technologies like blockchain technology (the underlying tech behind Bitcoin).
- You’ll be able to trade in a highly volatile, high profit-cap market.
- You’ll be able to transact and pay in Bitcoin in a pseudonymous fashion.
- Most of all, Bitcoin’s price has the potential to increase a lot. There aren’t many assets that can go x10 in less than a year!
Cons of buying Bitcoin
- The risk of getting your Bitcoin hacked or stolen. However, if you educate yourself on cryptocurrency security, this shouldn’t be a problem.
- It isn’t highly regulated yet. This is what it takes to be an early investor.
- Bitcoin is still very volatile. Its price can decrease as quickly as it can increase.
This is just the bare-bones answer to the complex question of whether or not you should buy Bitcoin. If you plan on investing, remember to educate yourself on how to keep your assets secure.
So, Is Bitcoin Here To Stay?
Cryptocurrencies are trendy — with new cryptocurrencies being developed by large institutions, such as the Libra coin (by Facebook) and the JPM coin (by JP Morgan).
Bitcoin is also the first working cryptocurrency that has ever been issued, and the only one created anonymously. Unlike institutional cryptocurrencies, it is a currency by the people, for the people.
Which is why I firmly believe Bitcoin is here to stay for a long time — although no one can know for sure.