When Bitcoin was created 12 years ago, it sparked a multitude of questions. Some of which are still being asked today. Questions like “what is this new currency? Why all the excitement about it? Is it a smart investment? What does the future hold for Bitcoin?” And a host of others. If you have also been asking these questions, keep reading to find answers.
When Satoshi Nakamoto introduced cryptocurrency to the world in 2009, Bitcoin, being the first cryptocurrency ever made, was met with a lot of skepticism. Some of which bordered on the fact that cryptocurrency is not physical money and is not bound by government laws and regulations like Central Bank monies.
However, in a little over a decade, Bitcoin has gone from simply being this new digital currency everyone is skeptical about and has become a common currency used worldwide.
According to information gotten from coinmarketcap.com, the price of Bitcoin is now a whopping $56,000. When that figure is compared to the price it was ten years ago ($2 to be precise), it becomes clear that Bitcoin has experienced a good amount of popularity and usage in the past decade. And it is just scratching the surface. Why do I say so? Keep reading to find out.
Bitcoin’s Popularity in 2021
More data on coinmarketcap.com has also indicated that Bitcoin alone amounts to over %65 of all cryptocurrencies. With recent events like COVID-19 and the economic downturn having adverse effects on the global economy, the narrative on Bitcoin has gradually been altered from being only a digital currency for transactions to also becoming an asset to be held. It’s no wonder how Bitcoin has been able to bounce back and better after the 2020 crash experienced in the wake of the coronavirus.
Data available on Statista shows that the use of cryptocurrency is at an all-time high as of 2021, with bitcoin at the forefront.
Between 2019 and now, coinbase, the largest cryptocurrency exchange platform, has gone from 13 million users to a staggering 35 million verified users.
There’s been a discussion on coindesk.com that argues that cryptocurrency is a hedge against inflation. This discussion argues that because there is a limited number (precisely 21 million) of Bitcoins available, unlike central bank currencies that must undergo printing from time to time, Bitcoin (and possibly cryptocurrency as a whole) is safe from inflation.
Another noticeable effect the coronavirus had is the large-scale money printing by world governments to meet up the economic demands that came along with the pandemic. This move adversely reduced the value of several currencies worldwide and contributed to the current rise in inflation.
All these notwithstanding, Bitcoin has enjoyed an increase in unwavering interest and a monumental rise in market cap.
We can never really say that we know the exact number of Bitcoin owners worldwide as it’s in the very nature of Bitcoin not to be so easily traced. However, with the right intelligence on the matter and a good assessment of the amount of Bitcoin currently in possession in different locations worldwide, we can make an informed guess.
Statistics suggest that at least 2 billion people worldwide have heard of Bitcoin. Further information shows over 200 million Bitcoin wallets (with and without Bitcoin), 100 million wallets containing Bitcoin, 1 million active daily Bitcoin users, and 53 million Bitcoin traders worldwide.
These figures suggest that not all Bitcoin wallets contain Bitcoin in them. For the wallets containing Bitcoin, only 53 million wallets trade this currency, and of those 53 million wallets, only 1 million wallets are put to use daily.
These numbers further suggest that although not everyone can actively participate in all the Bitcoin action going on (and not everyone wishes to), the world is increasingly recognizing the role Bitcoin has come to play and the fact that Bitcoin has come to stay.
The world of business is starting to understand that not owning any Bitcoin or even having little or no interest in the currency does not take away from the fact that its ease of access and usage has made it a fast-rising currency increasingly in need on a global scale.
And because no one wants to be left out, we find that people will rather have a wallet where Bitcoin can be received and stored instead of not having one at all. It’s like being able to open a bank account without having actual money in it.
All these attributes make Bitcoin a trendsetter and have put it well on its way to becoming a universal currency or choice.
Why Bitcoin is the Currency of the Future
The invention of Bitcoin has brought about many changes, and like everything else, there have been positive and negative aspects to these changes. In this case, however, the good outweighs the bad, and from the response rate that has been witnessed so far, we can say that these changes are welcome.
A 2019 study puts 25 million crypto traders outside the US and Europe. Another research carried out showed that in the first five years of its arrival, the US, Japan, and South Korea had the most crypto traders. More recently, however, and with the help of platforms like Remitano.com, emerging markets like Nigeria have been able to leverage Bitcoin and other cryptocurrencies to drive economic growth and provide jobs.
Because Bitcoin is not as regulated as the American Dollar or the Japanese Yen, more people subscribe to it. Statistics show that more people will yet subscribe to it in time to come due to the ease of transactions and reduced dependency rate on fiat currencies that Bitcoin provides.
Another change brought on by the arrival of Bitcoin is seen in businesses and how they are conducted today. Bitcoin has drastically reduced transaction costs by terminating the need for a middle man through peer-to-peer transactions and further facilitated effortless business exchange. (For more information on peer-to-peer networking, click here.)
In the highly regulated world of international trade transactions, bitcoin (and cryptocurrency in general) has tremendously leveled the playing field for small businesses and emerging markets and removed the currency barrier by providing a single currency with one exchange rate.
With all these possibilities, we will find that a simple farmer can supply products to international companies and markets without a middle man, a regulatory body, or even needing to worry about exchange rates in the future. A welcome change indeed.
Now you may be wondering what the experts are saying.
What Experts Say about Bitcoin
In a recent statement, Jesse Powell, Co-founder, and CEO of Kraken, said that Bitcoin would soon become a global currency. A $1 million price target within the next ten years is quite reasonable. Business magnate.
In a recent interview with CNBC’s Fast Money, Julian Emanuel, chief equity and derivatives strategist, talked about bitcoin. He affirms that cryptocurrency has a place in financial portfolios while also predicting the price of Bitcoin to go as high as $50,000 in the year 2021.
Just last year, Paul Tudor Jones, a notable large-scale investor, in a report titled The Great Monetary Inflation, explains why he has invested about 1 or 2% of his assets in Bitcoin through his Tudor BVI fund.
In this report, Tudor states that because the world now craves new and safe assets, it may have created a growing role for bitcoin. Further stating that Bitcoin brings gold to mind and the role it played in the 1970s.
Co-founder of Apple, Steve Wozniak, believes that Bitcoin is the singular most pure form of digital gold.
Why You Should Invest in Bitcoin
It is safe to say that while Bitcoin may be a smart investment, its high volatility also means that it is not an investment for the faint of heart. Every investment has its risks and benefits, and Bitcoin is not left out. But as earlier stated, there are more pros than cons.
As is the nature of assets, Bitcoin allows for a low purchase price and high sale. As a result, we find that investors now treat the currency like assets like bonds, equities, or real estate. Amassing wealth by buying when the price is low and holding until the price has risen again. And so, as is the case with most investments, patience is key.
In situations where the government is unstable or oppressive, there’s a heightened need to have assets stored in safe places. Places that are out of the reach of the government and will not suffer the effects of an unstable economy.
As time goes on, more businesses will begin to adopt Bitcoin as an acceptable payment method (as is already the case in some parts of the world) due to the security and convenience that cryptocurrency provides.
Current inflation rates and events threatening further inflation have created a greater need to invest. If Venezuela teaches us anything, it teaches us that an economy is never too good or too developed that one does not need a safety net. Bitcoin could be that safety net.
What Should We Expect in the Future?
Looking at the image below, we can see that Bitcoin is in the most performing asset class of 2020.
This information, along with many others, indicates that Bitcoin beat all the odds it was faced in the previous year and came out at the very top.
With this in mind, and from a look at Bitcoin’s price history, it’s safe to say that Bitcoin will only go up from here.
Because it is highly volatile, a few drops are expected in the future. Available data shows, however, that the ultimate growth and further spread of Bitcoin are inevitable.
Over the years, with the increased number of transactions Bitcoin has experienced, its blockchain has also suffered issues with scalability. This was largely due to the 1MB block size limit that Bitcoin has.
As a result, many advocates have called for more use of Bitcoin Cash as it proposes to remedy the situation through a block size increase from 1MB to 8MB or more.
The birth of Bitcoin has put the financial world on an entirely new path. Inevitable changes around the world, combined with past events and predicted future events, have not only made digital money a necessity but have also increased the need for unregulated transactions and asset management.
Even though cryptocurrency is still very much an emerging trend, it has already made such a great impact on the global economy and different currencies worldwide that the world cannot easily ignore it.