Bitcoin has had a phenomenal start to 2021, topping $40,000 per Bitcoin for the first time ever.
The second half of 2020 was noteworthy for the flood of institutional money flooding into the cryptocurrency market.
The resilience of that digital coin and others – and the reasons behind it – have many excited not just about the prospects for this young asset class in 2021, but also for the general adoption of this burgeoning financial technology.
With a bit of help from the media, the general public has become wondering about the fascination women have for the brand new venture known as bitcoins. As a currency, it stands out among all others. The issue is that a lot of people still do not realize just how it works or perhaps how to use it.
This growing macro case for bitcoin has vindicated long time bitcoin believers that have cheered the latest price explosion.
Despite these expected “bumps,” most in the bitcoin and cryptocurrency space are predicting the bitcoin price will continue to rise over the long term.
With any significant change to the economy, there is going to be questions as to how this impacts the future of each specific currency pair. Naturally, investors are focused on the impact that the loss of the U.S. dollar will have on Bitcoin.
What Exactly Is Bitcoin?
Let’s review the basics:
Bitcoin is one of many digital currencies. Unlike traditional “fiat” currencies created and operated by a government and central bank, Bitcoin is actually “mined,” or created by individuals which solve mathematical problems with computing power. Transactions are actually kept on the blockchain, an encrypted and decentralized ledger which protects the integrity of Bitcoin while also ensuring the privacy of the user.
It was the birth of an entirely new financial paradigm.
Bitcoin has had some basic periods after its creation in 2009, but analysts are no longer claiming the “death of Bitcoin.”
Bitcoin More Than Survives In 2020
Bitcoin values fell steadily after sharp rallies in 2013 and 2017, but these declines were not precipitated by any significant event spanning multiple asset classes. The digital coin was only cut by the other advantage of speculation’s blade; worries about hacking risks, for example, hampered cryptocurrencies in 2018.
Cryptocurrencies were hardly immune from the bear turn. Investors first began selling off equities in February as they moved to cash, and even safety plays including gold ultimately took a dip in March. But Bitcoin eventually fell, too, crashing hard in mid-March.
Bitcoin bounced quickly, as most of the big institutional funds moved in once they saw how the bitcoin price continued to move higher.