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Bitcoin was able to emerge from the street of the tech-savvy to become a global interest. Today, Bitcoin is dominating headlines and pulling in more people interested in generating revenue from the cryptocurrency. The coin’s popularity has reached new after it gained 600% in value over the past 12 months.
Bitcoin is also gaining ground with retail investors, ultra-high net worth individuals, and financial institutions. Banks such as Goldman Sachs is conducting cryptocurrency trading and banks such as Citigroup are looking into providing cryptocurrency trading, custody, and financial services. Large publicly listed companies including MicroStrategy have bitcoins worth billions of dollars in their balance sheets.
This is not to say that the cryptocurrency industry has not met sharp sell-offs and turmoil. The greatest division in Bitcoin is on those that believe that it is an obsession while for others it is a speculative bubble. According to different financial analysts, it is depicted that very few people actually comprehend how Bitcoin works and thus the controversies surrounding it. Sandra Ro on the Financial Times says that whereas crypto was once messy, it has built multi-million-dollar companies today.
As we can see people investing in cryptocurrency especially Bitcoin is that they instinctively feel that it may be too good to be true. This is normal especially when we see that Bitcoin was the best performing financial asset in 2020. Bitcoin today is worth 600 percent more than it was a year ago. And despite the coin experiencing extreme fluctuation in prices the coin has maintained a steady growth.
Some of the most recent prominent cheerleaders of the coin are billionaire hedge fund managers and the Tesla chief Elon Musk who believe that where Bitcoin is equated to gold, the coin’s exchange rate compared to traditional currencies has greater potential for growth. Therefore, with such great reviews, the question begs whether retail investors should treat Bitcoin as a genuine investment opportunity or shrug it off as a Ponzi scheme?
The value of Bitcoin has increased by 85% since January. It is observed that platforms such as Bitcoin Prime, dealing with digital currency are attracting significant sums of money. Young people have been reported to be at the forefront in investing in cryptocurrency. The millennial and Gen generations in the UK have been seen to prefer purchasing cryptocurrencies as opposed to equities. According to a survey, 51% of respondents had dealt in digital currencies.
The great returns are even making skeptics to consider investing in Bitcoin with many long-term doubters showcasing changes in opinions across the globe. One great skeptic is Jamie Dimon who is the chief of US bank JPMorgan who has been depicting Bitcoin bulls point a great difference between the 2018 Bitcoin collapse from $16,000 to $3000. They depict that today; the market is based on institutional investors and professional trading firms and this aspect brings instability.
It may therefore be very tempting to provide a conclusive opinion on Bitcoin’s future based on various aspects of its performance. As a high-yield asset, Bitcoin has proved worthy. It may have great potential for long terms value storage but still needs to prove a lot as a medium of exchange.
Bitcoin appears to be the future of currency, with institutions adding it to their balance sheets. Bitcoin’s monetary policy is far sounder than that of any government because it is not controlled by any central authority. Investors are seeking for alternative investments to protect against inflation as governments print more money than ever before in the wake of the pandemic. Many people are doing so with Bitcoin, which will help cryptocurrency adoption in the long run.
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