Bitcoins: A Bubble Or A Good Investment?
The last few months have been really volatile for Bitcoins. Bitcoins in this short span has attained almost all values between $1000-$40,000, well, figuratively. The chart of the last 12 months looks more like a huge wave, whose peak increases drastically near the end. In January 2021 bitcoin surpassed forty thousand dollars a coin mark!! But, some of the biggest names in finance say that it could be several times that by the end of the year.
Some experts even predict that it could easily pass a hundred thousand mark then, mind-boggling, right? Some say it might even cross one hundred and fifty- two hundred thousand mark. But wait, this dramatic rise was seen in 2017 too, and then it fell off a cliff. So is it going to be the same this time? The answer is NO! Crypto experts say that this time the higher run of bitcoin will last for a longer period.
At the initial point in the rally, many had suspected that this is a bubble and when it bursts the real valuation would be known. But, fortunately, or unfortunately, this time it’s not a bubble. Perhaps this rally could be the one everyone is waiting for. This has the potential to be a game-changer!
So, what is driving the price of bitcoin to such levels?
Well, to begin with, with the pandemic disrupting the economic activities at the start of 2020, things haven’t still returned to a normalized state. There is a lot of volatility in stock markets as well. So, the COVID-19 pandemic and the subsequent steps taken by the central government are the major reasons why many institutions started to invest in bitcoins. A year back, had anyone asked these very institutions whether they will invest in bitcoin at some point, probably the answer would have been NO.
And it’s not just businesses or financial institutions that are turning to bitcoins. Athletes and celebrities around the world have shown interest in bitcoin. Recently, Russell Okung officially became the first sports player to collect a portion of his salary in bitcoins. Nowadays, common people have also started investing and the good thing is they not only invest but also relate that to a good source of income, just like a stock market.
While this pandemic has hurt many industries, it certainly has helped the cryptocurrency industry to attain more market share. This has given cryptocurrency as newly found legitimacy and acceptance amongst institutional investors, hedge funds, insurance firms, and common people in general. Started with very few owners, now, there are more than 67 million BTC owners in America and Europe alone.
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