Analysing the Rise of Bitcoin

by Sanju


You can hear people talking about Bitcoin (BTC) a lot these days since it has become a sensation in the financial world. Investors do not want to lose any opportunity to buy BTC to earn handsome profits. 
 

Launched in 2009, Bitcoin was an unknown phenomenon worldwide. BTC was designed as a currency that you can use in daily transactions.  

Worth pennies, in the beginning, Bitcoin has come a long way and withstood the test of time. Today, only a few investors would like to own BTC because of its high value and volatility which requires great care.  

Let us analyze the rise of Bitcoin and find out its important benefits.  

What is Bitcoin?  

Since it was first introduced, Bitcoin has had an unstable journey, but its value has been rising throughout the years. An asset and a currency, you can use BTC in multiple ways.  

Bitcoin is the world’s first-generation cryptocurrency that is supported by blockchain technology Virtual currency is a peer-to-peer payment method system that works in a decentralized manner.  

BTC is protected by cryptography which consists of complex mathematical problems that are hard to break. The protocols of Bitcoin are designed in a way to ensure a hedge against inflation and market uncertainty.  

You can only trade a limited number of Bitcoin since it has a finite supply. In addition, you can make a Bitcoin transaction at any time across the globe, thanks to its 24/7 availability.  

Carl Runefelt, alias, The Moon, is a global crypto leader who is pushing for the mass adoption of Bitcoin.  

He says, “I think Bitcoin has done incredibly well in the past year. You can see just like a little bit more than a year ago Bitcoin was trading down at $3,000. Now, it is more than ten times higher. So, I’m happy about those per that performance just compared to gold. Gold has nearly done nothing in that same period. So, I would already say that Bitcoin is performing much better than actually any asset out there while still taking a low risk.”  

Why has Bitcoin Become Popular?  

When it comes to crypto investment, investors prefer investing in Bitcoin since it is the world’s largest cryptocurrency by market capitalization. Many global leaders have supported BTC as the best alternative to fiat or traditional currency, thanks to its profitability and enhanced safety.  

Bitcoin has left other cryptocurrencies behind in the race of achieving higher value. More than 10,000 cryptocurrencies are available in the crypto market, but none comes closer to BTC value.  

Here are some of the reasons behind the popularity of Bitcoin.  

  • You can make quick transactions with Bitcoin across communities, thanks to its exceptional characteristics.  
  • The fees of BTC transactions are low compared to bank transactions.  
  • You can not only use Bitcoin as an asset to invest but it is also a currency that you can use to buy things.  
  • Bitcoin ensures an inflation hedge since it has a limited supply.  
  • Unless you lose the key to your crypto wallet, no one can access your Bitcoin.  

Challenges with Bitcoin  

Where Bitcoin has changed the fortune of many investors, there are also some who have lost money in the crypto business. This happens with those who do not understand how the crypto market works and start investing without any planning.  

Here are some of the challenges with Bitcoin that you should be careful about when investing in it.  

  • The first challenge with Bitcoin is its lack of understanding. BTC is a new concept of money and anyone willing to invest in it without any planning will end up mismanaging it completely.  
  • Cryptocurrencies including Bitcoin are a volatile investment. Since BTC is unregulated, the crypto market thrives on speculations. This makes cryptocurrencies vulnerable to price fluctuations and anyone can suffer losses.  
  • Nobody can predict the future of Bitcoin and other cryptocurrencies accurately. Cryptocurrency has not yet proved itself a long-term investment. One of the biggest challenges with Bitcoin investment is that investors consider it for the short term which can be a big disaster.  
  • When you are putting money in your bank account, there are multiple ways of securing it. But cryptocurrency works in other ways. All you can do is use either an online wallet or an offline wallet to store your Bitcoin and it depends on the key of that wallet. Once you lose the key or share it with an unknown person, you can lose all of your Bitcoin. And interestingly, there is no way to retrieve the key to your crypto wallet.  

Things to Remember When Buying Bitcoin  

Bitcoin investments are rising worldwide because of their multiple benefits. 

As an investor, you always prefer an asset that can ensure better returns safely.  

Carl, on his YouTube channel, The Moon, says, “Trading is fun as well of course but that’s active management and you know there are different times for different strategies but if you want to make money passively and always have like a stream of income then I think to look into different strategies.” 

Here are some important things you should remember as a Bitcoin investor.  

  • You should understand Bitcoin comprehensively before investing in it.  
  • Always devise a strategy to invest wisely in Bitcoin and never invest all your life savings in it.  
  • Invest in BTC that you can easily afford to lose.  
  • Do market research and avoid market sentiments as they can lead you to bad decisions.  
  • Read the current trade chart of Bitcoin carefully before investing in it.  
  • Start accumulating a Bitcoin if you lack funds for purchasing it for once.  

Conclusion  

The world was unknown of the phenomenon of cryptocurrency when Bitcoin was launched more than a decade ago.  

Bitcoin has come a long way and become the world’s largest cryptocurrency because of its multiple benefits. The adoption of Bitcoin is rising each day and people find it a lucrative investment.  

The value of Bitcoin is expected to increase in future, but it depends on you whether you can buy it now when it is affordable or can wait until it becomes unaffordable again.  

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