Gone are the days when you needed fiat currency for transactions!
With the advancement in technology, everything has become digital, including money and currency.
This is the era of cryptocurrency!
It is a type of virtual or digital currency which holds value. You can use it for trading, investment as well as for commercial transactions.
There are more than 5000 cryptocurrencies in the market, but Bitcoin holds the topmost position.
It is not only the most popular but also the first cryptocurrency to gain traction in the market.
As per the recent market value and growth trends of Bitcoin, it is clear that this cryptocurrency is too important to ignore.
Even the traditional investors who were once against Bitcoin are now supporting this currency. Bitcoin has reached the market cap of $1 trillion, which clearly shows that people have started adopting it as a new form of currency.
In order to understand the reason behind the rising popularity of Bitcoin, you need to learn the basics about it. Here’s everything you need to know about Bitcoin and its growing popularity.
What is Bitcoin?
It is a cryptocurrency that is built using a decentralised platform called a blockchain. This digital currency was invented in the year 2009. Nobody really knows about the person or group of people who created Bitcoin as they have used a pseudonym, i.e. Satoshi Nakamoto. As it is a decentralised currency, there is no involvement of third-party, government or a middleman.
Bitcoin laid the foundation of cryptocurrencies which was later resulted in the introduction of various other cryptocurrencies in the market.
The best thing about Bitcoin is that there is no government interference. It is not affected by political uncertainties or inflation. When you use Bitcoin for trading or commercial transactions, your personal details remain hidden. It maintains anonymity.
The value of 1 Bitcoin was $1, which increased to $1000 in 2013. In a time span of two years, the value of the coin increased by 1000%. Ever since then, Bitcoin has seen various ups and downs.
However, currently, Bitcoin is thriving in the market. After 2020 Q1, the value of Bitcoin has increased considerably, and the currency is showing no signs of stopping or slowing down.
Why Is Bitcoin Too Important To Ignore?
Ever since the pandemic, Bitcoin has made several headlines due to its amazing performance. The currency came in like a knight in shining armour for investors when all the other assets and securities failed.
However, last week Deutsche Bank stated that this currency is too important to ignore. They have published an entire report highlighting the amazing performance of this currency despite being volatile.
As per the report, Bitcoin price will keep on rising as more and more people start adopting and accepting it. Here are some of the reasons why Bitcoin has become important and why one should not ignore it.
Rising Value:
This year Bitcoin market value reached the peak of 1 BTC = $61,800. However, the value dropped in the third week of March to $58,000. Even though it is a volatile currency, the value keeps on rising. The value of the currency is one of the reasons behind its growing popularity.
Largest Cryptocurrency:
Bitcoin is the largest and the most popular cryptocurrency in terms of market value. Most of the people who deal in crypto prefer investing and using BTC as it is more acceptable. After BTC comes to Ethereum with a market price of $1,850, it is the second-largest digital currency after Bitcoin. You can clearly see the price gap between the two currencies.
Market Capitalisation:
The market capitalisation of Bitcoin has reached $1 trillion. It makes Bitcoin the largest cryptocurrency and the third-largest currency in circulation. There is nearly $1 trillion worth of BTC in circulation. It clearly shows that more and more people are investing in and using this currency. It makes Bitcoin too important to ignore.
Third Largest Currency:
Bitcoin has become the third-largest currency in the world after USD and Euro. The total BTC in circulation is at par with the Japanese Yen. This cryptocurrency is competing with even the top fiat currencies. In the last two years, the value of BTC has increased drastically. In 2019 BTC was 3% of USD, and now it has increased to 40%. As per experts, the value will keep on rising because of the Tinkerbell Effect.
Tinkerbell Effect:
The value of Bitcoin is similar to the Tinkerbell Effect. It is an economic term. It means that when more people believe in something, it is most likely to happen. In terms of Bitcoin, it means that the value of Bitcoin will keep on increasing if more and more people believe that it is worth it. As most of the investors are believing in BTC, the price keeps on increasing.
Retail Investors:
Reports show that both retail, as well as institutional investors are adopting Bitcoin. However, retail investors are investing more funds into BTC. In 2021, they have purchased nearly 187,000 Bitcoin. At the same time, institutional investors have bought 173,000 BTC. In 2020, more institutional investors were interested in BTC, but the trend is shifting as more retail investors are coming into the picture.
Institutional Investors:
Institutional investors are investing in Bitcoin as it proved to be a safe asset during a pandemic. They are holding less cash and investing more funds in BTC. All the big corporations are investing millions in BTC as it is a safer option. Instead of simply buying and selling the coins, they are holding them in their portfolio. This coin holds an important place in many big investment portfolios.
Morgan Stanley Involvement:
Morgan Stanley is going to launch three funds in the near future. It will help the clients to invest in crypto. Now the wealth management clients will get a chance to invest in BTC. It will make BTC more accessible and adaptable to people.
Central Bank Digital Currencies:
All the central banks are planning to launch their own cryptocurrencies. They are showing more and more interest in crypto, which shows that it is going to stay in the market for a long time.
Bitcoin Adoption:
Bitcoin adoption is increasing at a fast pace. More and more investors, corporations and individuals have started using BTC. It serves three purposes, i.e. asset, currency and payment method.
Safer Alternative Asset:
Bitcoin is a safer alternative compared to all the other assets in the market. Even though it is volatile and limited, it is as safe as a gold investment. Because of this reason, people are fearlessly investing in BTC.
Performance during Pandemic:
Bitcoin has shown an outstanding performance during the pandemic. This currency has shocked all the experts and analysts in the market. After the initial price decline in the month of March, the price gradually increased and keeps on increasing even in 2021.
These are some of the reasons why you should consider using Bitcoin. All these factors make this currency too important to ignore.