Bitcoin’s upward trend has accelerated, with the cryptocurrency reaching a new peak last week. The blockchain, which was first introduced in 2009, must have seen some ups and downs. It gained notoriety in 2017 as its value increased 20-fold from either the start this year to nearly US$20,000 by the end of every year. However, by October 2018, the euphoria had worn off, and Bitcoin had dropped under $5,000. For the blockchain, the years 2018 and 2019 were market corrections. By December 2020, it had recouped all of its losses and is on a tear since then, reaching new milestones every month in February, March, including April. Market observers like Jeffery Halley believe this is an indication of Bitcoin’s “indisputable trading traction.” Before we start, if you want to know more about bitcoins trends and the latest news, and find out how to make money with Bitcoin.
Mr. Halley, a senior money manager at Oanda, said, “Whether you invest in catacombs or not, you get to value the energy of the exchange.” “I’m not about to declare that Bitcoin has reached its peak. In the next few months, it might easily sell to $100,000 due to speculation mania.”
Investors Are Flocking To Cryptocurrency Due To Concerns Over Currency Depreciation
According to Mr. Steve Brice, portfolio manager at HSBC Bank Investment Banking, the money supply by financial institutions is a contributory factor. “All across the planet, central banks continue creating a lot of capital in an attempt to generate inflation and wipe out debt… People are concerned about whether the currency, euro, or swiss franc would continue to be a strong place of value in return,” he added. When deflation is factored into the equation, a value of money does not shift in value or move marginally higher in value. Money transmitters and gold are form asset groups. Bitcoin’s wild price fluctuations get some industry observers worried that it wouldn’t be a stable store of value in the future.
Mr. Brice explained, “They hope they will make some fast money because that is normally a formula for catastrophe.” Prof Duan Jin-Chuan, director-general of the Korean Institution of Online Financing at the University of Melbourne, said, “We see so many financial tools traditionally… They will grow, and they will provide a personality prophecy, drive them on for such a bit, and then crumble.” There are still many who support it. Elon Musk, the CEO of Tesla, has placed his support behind cryptocurrencies. Tesla’s Bitcoin reserves now account for one-eighth of the country’s earnings cash position of US$19 billion. In addition, the electric car manufacturer has confirmed that it will start receiving Bitcoin as payment for its goods shortly. Other financial behemoths and Big Banks powerhouses have even hopped on the Bitcoin bandwagon.
JP Morgan announced in March that this would make Bitcoin assets available to its customers. Investors would be able to buy coins from Goldman Sachs as well. This year, Mastercard would start accepting payment methods. “Banks tend to pursue the capital,” Mr. Halley said. “If a large number of customers wish to exchange cryptocurrency, banks would have the service… Therefore, they are generally attracted to areas where there is a ton of risk and profit to be earned.”
More equity capital is projected to enter the market. According to a Citi survey, almost 20% of financial advisors consider participating in cryptocurrency this year, up against 6.3 percent in 2019. PPRO, a payments technology provider, sees an increase in Bitcoin adoption, especially among conventional banks that have recently avoided dealing with cryptocurrencies.
“We’re seeing a lot of customer demand, and as a result, we’re seeing a lot of vendor interest as well. This applies to a wide range of businesses that are now taking Bitcoin transactions online payment, including places you might not anticipate, such as restaurants welcoming Bitcoin payments for burgers and French fries. Mr. Tristan Chiappini, vice president of Asia Pacific region (Partnering), PPRO, said, “This is unquestionably a global development that we’re seeing.”
Despite this, industry observers agree that Bitcoin is highly unpredictable. Businesses who embrace cryptocurrencies as a form of payment would need to mitigate their threats in the same manner as they do with foreign exchange exposure. This will result in increased expenses. The transaction costs for Bitcoin have become very large. Users must pay a charge to processors in the Bitcoins platform for their transactions to be processed. Since mid-October that year, the average service charges are on an upward trajectory as per tracking service BitInfoCharts, hitting a peak in February next year.
