Bitcoin has become a 'newsmaker' recently, and since there are quite a few people involved – many support Bitcoin in one way or another, others consider investing into it, recent fluctuations give birth to panicky tendencies amongst the investors. The growth of Bitcoin value attracts thousands of new investors and, quite naturally, the cost of one Bitcoin grows further. This is determined by the fact that the resource is limited and thus the more people wish to own a piece of currency as it becomes more expensive.
This can easily be illustrated by last year’s unprecedented growth of Bitcoin. By the end of the year, the currency had reached its historical maximum and was traded at around $19,000 per coin. This is unthinkable in terms of traditional currencies since only about nine years ago, Bitcoin was much cheaper than US Dollar.
However, optimistic expert evaluations of the currency’s future came to an abrupt end in February. In its first decade, the currency was traded at nearly one-third of its previous year’s peak, just around $7000. For many investors and those who only consider Bitcoins to be possible means of investment, this news was disappointing. But how likely is it that Bitcoin is yet another financial bubble as some of the skeptically charged experts speculate?
Firstly, it is important to realize that cryptocurrencies, and Bitcoin as one, are still far from conventional and this explains part of the fluctuations in the markets. The authorities are at a loss as they do not yet know how to regulate or tax it. Nor are investors certain as to how the currency will react to stimulus, and thus, don't know how to respond to any news related to the digital currency market. They end up taking spontaneous actions in an attempt to follow the behavioral patterns of the majority.
In such situations, it is necessary to remember the number of measures introduced by financial regulators and major banks all aimed at limiting the ability of their agents to buy cryptocurrency. A number of big banks have banned all the transactions related to Bitcoin purchases. Facebook has even banned all the advertisements of Bitcoin trading platforms. South Korea recently introduced a legal limitation which prevents citizens of the country from anonymously trade cryptocurrencies and the United Kingdom’s government is also expressing similar intentions.
The US authorities have recently numerously emphasized their concern regarding the popularity of cryptocurrencies in the criminal world. It is worthwhile remembering that transactions made via blockchain are of irreversible nature. This is why the popularity of cryptocurrencies is indeed significant among cyber criminals and other people who seek to avoid the control of any governing bodies and not merely out of love for democratic values.
All these concerns, accompanied with uncoordinated actions undertaken by authorities, some countries and, major banks develop the prerequisites for these fluctuations in the markets. These fluctuations provoke panic among the investors, which in its turn fuels speculations of some experts about Bitcoin being no more than a financial bubble.
Gossip circulates that it will not be able to withstand the pressure from the side of authorities around the globe and will soon burst. Still, as we have recently seen, Bitcoin has entered a phase of steady growth after it’s most recent unprecedented fall. Thus, even though similar major fluctuations remain likely in the short-term perspective, in the long-run, few experts doubt that Bitcoin, along with a number of other major cryptocurrencies, will become more and more universally used as payment methods.
Considering the limited number of coins, Bitcoin will continue to gradually grow in value and this is why it is a very prospective tool for long-term investors. It is reasonable to choose among the Bitcoin wallets and start investing. The number of companies which now accept Bitcoin for their goods or services is constantly growing, so even though it is far from being a mainstream payment method, it will become one within a few years. this will allow wise investors to make major profit.