Invented in 2008 by “Satoshi Nakamoto,” Bitcoin is a cryptocurrency that is just like money but completely virtual. Physical bitcoins are of no value without the private codes printed inside them.
When it first started in 2009, it was worth basically nothing. But now, a single bitcoin is worth thousands of dollars. Although its monetary value continues to fluctuate over the years, it cannot be denied that it’s a type of investment that’s worth considering.
In recent Bitcoin news, many were puzzled as to why the prices of bitcoins have soared despite the coronavirus outbreak. As more countries started enforcing lockdowns due to the Coronavirus, stock prices plummeted and an economic downturn was expected. On the contrary, investors who were nervous about the global crisis, sought other opportunities. This resulted in bitcoin prices going up this 2020.
Reasons for Bitcoin Prices Going Up
- Ongoing economic uncertainties
There are numerous factors that helped boost the price of bitcoins. These factors are the Brexit concerns, political tensions between South Korea and Japan as well as the prolonged US-China trade tensions.
However, the biggest factor is said to be COVID-19. This ongoing global pandemic, which was first identified in China, has affected millions of citizens from more than 188 countries and territories.
The same can be said with gold. Late last year, the Federal Reserve along with numerous central banks around the world lowered interest rates. This is to show support to their economies that’s suffering due to the global pandemic. It resulted in the weakening of the US dollar versus other currencies, but it benefitted Bitcoin and gold.
- A good alternative to safeguard wealth
The decline in the US dollar against other currencies led people to look for other types of investment that’s safer and more secure. With the notion that the value of government-backed currencies will fall, investors have turned to put their hard-earned money to Bitcoin instead of stocks.
- Investing in bitcoin has become mainstream
Cryptocurrency initiatives led by big tech companies have led to Bitcoin investing to become more mainstream. Because cryptocurrencies received backing from such companies, it authenticated distributed technologies and digital assets, leading users to revel in the agility and versatility that this technology provides.
Bottom Line:
There are many other reasons and theories that can be explored to explain the spike in Bitcoin prices. But the bottom line is, Bitcoin is an attractive investment that people should consider especially during this pandemic.