Bitcoin has been around since early 2009 and despite its ups and downs along the way the coin is now worth more than $27,000. The coin’s volatility may have been discouraging for some, but this currency is still going strong for many reasons.
- Bitcoin plays a significant role in the establishment of the Metaverse. This is thanks to its nature as a decentralized platform.
- Bitcoins are limited, requiring users to mine them. Mining requires a computer to perform complex calculations.
- Increased adoption online and at physical vendors combined with more brokers allows the coin to hold its own as a currency.
- Recent events combined with an influx of spare income have permitted the coin to gain increased popularity as an investment opportunity.
Rise of the Metaverse
While the Bitcoin price is high, it had an astounding effect on helping build the Metaverse. Popular online spaces and attempts at creating a real metaverse have increased Bitcoin’s online presence. For example, games like The Sandbox use cryptocurrency blockchains to create limited and unique items.
Bitcoin is one of the cryptocurrencies that is used to fuel these metaverse applications and while it isn’t the only one, it does offer a lot of opportunities thanks to its prominence as a high value coin.
Scarcity
Bitcoin’s value comes from its scarcity as there are only a limited amount of coins available while the supply is constantly diminishing.
This decrease in supply boosts the demand and the price. The only way to put more of the limited supply on the market is for the coin to be mined. The process requires a computer solving equations and slowly earning bits and pieces of the currency.
Volatility
While it may seem strange, Bitcoin’s volatile nature influences the reason it’s popular with investors. In short periods of time, the price can significantly fluctuate. These fluctuations increase or decrease by hundreds and thousands of dollars.
For investors who watch and wait for these intense moments of selling high and buying low, Bitcoin offers an exciting and profitable outcome. Though, it’s not without its risks.
Decentralization
Decentralization provides users with a convenient means to broaden their investment portfolio. The coin is not under significant government oversight, varying based on your country of residence. Blockchain offers a secure and easily comprehensible transfer process, although recently it has been harder to hide from the authorities.
Increased Adoption
In recent years, cryptocurrencies have been widely adopted in the online and physical markets. This adoption holds especially true for major financial institutions, which have begun to show an interest in the Blockchain and its many coins, especially Bitcoin. Slowly, this interest has started to lend more credibility to the cryptocurrency.
In 2022, El Salvador made Bitcoin a legal currency, fully accepting it as legal tender. Many banks are also trying to stay ahead of each other, offering more services and innovating to stay ahead of the more agile fintechs. Banking options that have begun to provide crypto-related services include JPMorgan, BlackRock, Fidelity, and New York Bank Mellon.
Macroeconomic Factors
During the COVID-19 pandemic, many citizens globally received stimulus from the government, specifically in the USA. Additionally, low-interest rates and various other minor financial influences allowed for an excess of money. For many, buying Bitcoin was one way of spending this, while others cashed out to have extra funds available.
The combination of events resulted in a situation where, in 2021, Bitcoin was valued at over $60,000. While the situation was short-lived, the coin was still extremely valuable that year.
Still Going Strong
There have been many hiccups and bumps along the way, but Bitcoin is still a prominent and widely used coin, popular online and in the Metaverse. While it may be only half of the boom that it was during 2021, it is still slowly climbing back up that hill.
Image by Liam Ortiz from Pixabay