For some time, we have seen some stability on the Bitcoin price, and a large belief that even the volatility was seemingly decreasing was starting to be accepted by many people. But yesterday, an enormous collapse on the Bitcoin price made this conviction go away.
Despite its speculative nature, bitcoin is emerging as a viable alternative asset class for institutional and retail investors alike. It has an immense amount of investment potential and is unlike any investment product in the world today.
Investing in bitcoins offers exposure to a global technology used by thousands of companies across dozens of sectors worldwide, and the ecosystem is only growing giving it a wide range of investment and business opportunities.
The blockchain is a trustless, decentralized, public ledger where all transactions in the network are verified and permanently registered. The blockchain stands as immediate, incontestable proof of all transactions and creates a permanent, immutable database.
Blockchain’s applications have the potential to stretch far beyond bitcoin, and companies and individuals are already leveraging the technology to modernize key products and services across a variety of industries. Remittances, payment processing, personal banking, auditing, secure data transmission, information hashing, securities settlement/clearing and traditional financial trading are just a handful of examples of its possible applications.
Some of the largest financial institutions in the world have already taken note.
This year we saw a lot of financial groups having a sudden interest on the Bitcoin technology. Both Barclays and Nasdaq OMX are reportedly experimenting with it. This year along, UBS announced plans to launch a technology lab in London to explore the potential uses of blockchain technology in financial services. Citigroup is said to be testing three blockchains and a cryptocurrency called Citicoin, while Spain’s Santander coauthored a report that estimated the technology could reduce banks’ infrastructure costs by $15 billion to $20 billion per year by 2022.
Bitcoin may be a more attractive investment vehicle than you think. Traditionally, most people have approached bitcoin as a digital currency. Although that is one of its principal uses, the blockchain is an important technology with a bright future ahead.