There is so much hype about Bitcoin doing rounds over the media. Here’s why you should care about Bitcoin.
Bitcoin is undoubtedly the most sought-after cryptocurrency in the market right now, increasingly attracting global investors and businesses. Its growth has also inspired a significant emerging market of crypto-friendly consumers worldwide. However, Bitcoin has also impacted growing concerns over its role in cybercrime, with critics insisting cryptocurrencies promote online-based criminal activities. Nevertheless, here’s why everyone should care about Bitcoin.
The Reserve Currency of the Crypto World
Thousands of digital currencies exist in the market today. However, Bitcoin holds the first-mover advantage since it is the one that convinced the world of cryptocurrencies’ value. Most people never thought digital currencies could work until Bitcoin proved them wrong. After Bitcoin’s unveiling, other experts started developing alternative coins.
Most virtual currencies are Bitcoin clones, based on their concept and technology. Bitcoin is also the most prominent cryptocurrency in market capitalization, accounting for almost half of the entire crypto market. Thus, nearly all other cryptocurrencies appreciate or depreciate based on Bitcoin’s performance.
Even the slightest impact on Bitcoin’s value could affect the larger cryptocurrency market. That is why experts advise beginner traders and investors to invest in Bitcoin first to test the market before putting their money on other digital currencies.
A Decentralized Currency
Fiat currencies have been the standard instruments for financial transactions for centuries. However, their supply and usage remain under the tight grip of central banks and regulatory authorities. The biggest challenge of such a system is that it makes it impossible for people to spend and manage their wealth as they wish. It puts the public at the mercy of financial institutions and regulatory agencies, denying them autonomy over their hard-earned wealth.
Bitcoin offers a better way to eliminate the inefficiencies and bureaucracies of the conventional financial systems. It is a decentralized virtual currency, not tied to any entity. That means neither the government, regulatory authorities, nor service providers can influence its supply and usage. That characteristic enables users to remit money, trade, and invest in Bitcoin without any external intervention.
A Highly Volatile Asset
Cryptocurrencies have high volatility since their value mainly depends on public perception. Bitcoin’s performance also follows a similar path, with constant and rapid upward and downward price fluctuations. Everyone thinking of investing in Bitcoin should care about its high volatility because it could impact significant gains or losses based on your investment strategies.
Volatility could be disastrous if the prices experience a sharp downward fluctuation, leaving investors with huge losses. However, it could also be advantageous if the prices fluctuate upwards, enabling investors to generate substantial investment returns. Crypto exchange platforms such as https://bitcoinmillionaire-pro.com/ usually provide comprehensive market analysis and tools to help traders and investors predict Bitcoin’s price movements.
However, there is no guarantee that Bitcoin’s price and the crypto market will move according to those predictions. Nevertheless, a proper understanding of the crypto market and timing could make a significant difference.
Diminishing Supply and Increasing Demand
Bitcoin’s demand has surged to mythic proportions in recent years, and experts predict that trend will continue. However, Bitcoin’s supply significantly decreases mainly due to its fixed market cap and the halving process. Bitcoin’s reserve can’t exceed 21 million tokens only, with more than 18 million currently in circulation. The halving process also contributes to Bitcoin’s scarcity, reducing the rewards issued to miners by half every four years. That allows Bitcoin to retain its purchasing power and gain immense value over time, promising lucrative returns to investors.
There are several great things about Bitcoin, and the ones discussed above are just the tip of the iceberg. However, it also has unique risks that you should understand before investing in it.
