Bitcoin has grown tremendously since its invention in 2008, turning it into a viable investment made by famous billionaire investors, institutions and retail investors. What will happen to the future of Bitcoin, which has reached record levels and has become one of the hot topics in global finance, and other cryptocurrencies that follow? We will explain in detail in our article.
Bitcoin, which was traded around $4K in March 2020, exceeded $40K in the first days of 2021. If you are an investor investing in cryptocurrencies, especially if you are a short-term investor, you can break away from the revolutionary power of cryptocurrencies. You follow the purchases of institutions for Bitcoin increase, Defi and updates for Ethereum.
For the price, these are good enough. In terms of fundamental analysis, the use and supply of crypto gives good results when investing. But take a step back and what are cryptocurrencies? When we look at why it has a value rather than an increase in price, you may be a little fascinated. First of all, why do cryptocurrencies have a value? Let’s explain why only 1 Bitcoin is priced above $50K.
First of all, let’s answer this why a person would demand Bitcoin, regardless of whether the value of a Bitcoin is $50K, $10K or $300K. When Bitcoin first came out, it was described as a payment tool and was shown as a competitor to virtual payment tools. The virtual expression here is important because you do not need a third party when you pay physically.
If the central bank signature on the banknotes is a 3rd party for you, this trade need can also be met by barter, that is, the exchange of goods. But paper money can also be used as an intermediary for payments here. Because paper money is not that volatile in terms of value during the realization period of the trade. It is a competitor as a virtual payment instrument because in fact, this transfer is not between you and the person you trade with, but through a third institution.
Banks or payment instruments are the institutions that you are affiliated with in transfers. These institutions, which are supervised by the state with various regulations, may be limited in countries that have not completed their development or in payments between countries. It is not very likely that Bitcoin will be in demand as a means of payment for developed countries, but every person who does not have access to the financial system but has the internet now has access to the financial system.
Blockchain technology can be done quickly and cheaply, even for small transfers, without intermediaries. Although this power seems to have decreased due to the intense interest in the last period, it is developed by independent software developers every day and is still cheaper and faster than traditional methods. But the real strength of Bitcoin is not that it is a means of payments today. Being a very powerful method of storing value.
Regardless of the benefit of an institution or party, bitcoin, whose supply is stable and stable, is becoming more resistant to the economic trend day by day. Bitcoin, which is still volatile today, has started to be preferred by companies. While this may have a small advertising effect, the main reason is that companies with surplus cash want to protect the value of their money. As Central Banks no longer aim for financial stability rather than the value of their own currencies, one side may not be so happy with the decisions taken. Or the central banks of some countries may make wrong decisions.
The 2008 crisis is the event that triggered the emergence of Bitcoin, which affected the people who are unrelated to the subject at the end of the day, which broke out with the increase in interest rates that started in 2004, but also with the excessive borrowing. Today, it is difficult to say that Bitcoin will be resistant to all these situations.
When the cash in your pocket is in danger, we see that the effects like March 12 continue. But the fact is Bitcoin is independent. And it is a candidate to be the most important value storage tool of the future. Because as the internet develops and our lives become virtual, we will need valuable tools online. Expressions with satoshi, not 1 Bitcoin, may become even more common. Ok, we have stated that Bitcoin is a candidate in this case and why it is valuable.
So why is Ethereum valuable? What is AVAX worth? LINK? FTM? They all have a different value proposition. What they all do is written in detail on our site. But these articles and analyzes are like the race within the cryptos themselves. What actually happened is this: These coins are the candidates for the New Financial Order.
The financial market has developed very rapidly, but with the development of the internet, it is not valid for some countries, it has not been able to reach this speed. On this path opened by Bitcoin, today it is possible to borrow in Bitcoin. Using specialized blockchains on the Avalanche network (this can be a legal contract or the ownership of a property), borrowing and lending can be tied to various rules. Cryptocurrencies, whose potentials are bought now, are the financial system of the future.
Excluding bitcoin, which itself can create a value proposition and move forward with it, the total value of altcoins today is $700 billion. The number may sound big, but 8 763 cryptocurrencies make up this value. America’s two banks are worth more than that. In addition, the assets of banks in the United States are around 24 trillion dollars. Cryptocurrencies were highly appreciated during this period. But cryptocurrencies can meet people’s needs for more democratic and accessible finance.
The biggest risk for a structure that is so adapted to the virtual is that they are technology. So Ethereum may not be the largest financial infrastructure forever. This shows that there is always opportunity for traders, eve as market growth slows.
Visits: 70
