A few years ago, cryptocurrencies were still considered as a financial product with no future; however, actually, they’re among the most prolific investments you can make to generate nearly-instant profits. Bitcoin is the oldest and the most valuable virtual currency to this day, and it recently reached the $20 000 spot for one unit.
What we should know about Bitcoin
The Bitcoin is the creation of an unknown Japanese developer named Satoshi Nakamoto, and was made public back in 2009. Initially used by only a few people, the currency boomed over the years, and gained popularity as it appeared to be a good answer to issues people had when using money online. First, the currency is safe to use, and it can hardly be counterfeited or stolen by hackers, thanks to its core functioning.
Secondly, you can send it to anyone worldwide totally free of charges. It thus has been used by people around the world.
The rise of the Bitcoin (and of its value)
The price for the Bitcoin went up slowly at first, then all of a sudden, it rose very fast, catching everyone by surprise. During one year, it started from a respectable $974 to an insane $20 000. If you were lucky enough to own bitcoins in December of 2016, and smart enough to keep them in a safe place and not to sell them, you would now have made a nearly 2000% profit. Anyways, since the market of Bitcoin is actually very volatile, it’s still interesting for anyone to invest in it.
Back in April 2017, nearly every financial analyst advised people to buy bitcoins, and predicted that the fever for the cryptocurrency would abruptly take end on July or August in the same year. However, they appeared to be wrong, and the popularity of the currency only kept going up. It was even more insane from November to December, during which the value of the bitcoin unit went up from $10 000 to 20 000$, partly due to the availability of its future on Wall Street on the 10th of December.
Bitcoin: just an economic bubble?
The definition of an economic bubble is the moment when a financial product is losing too much of its value at a fast pace and starting to lose also the investors trust. An example of crisis was in 2008, which first started in the USA before extending into other countries where the economy was codependent.
Certain specialists have compared this crisis to the Bitcoin, which it can be ironic considering the fact that Bitcoin itself was created as a remedy against crisis.
However its value increase pace has never been seen before in the world of economics. It is also the first cryptocurrency that is not related to a specific country in particular. Therefor it is quite difficult to make any estimations regarding the future of Bitcoin, even if pessimistic and optimistic climates are facing one another at the moment.
The bursting of the bubble after a fall
The severe critic of Bitcoin celebrate this unexpected fall which is not at all a burst of the bubble, but more so a consequence of various codependent factors leading to the current situation.
One of the major factors that has disturbed the market have to be most certainly the entry of Bitcoin Cash into the Coinbase broker. This has caused an explosion in the course of this Hard fork against Bitcoin.
Hence, the real question is not if the crypto-currency bubble has ended, but rather if the Bitcoin Cash is going to win against Bitcoin.