Bitcoin has been quite successful in gaining significant traction, ever since its inception in 2009. It was the first digital asset to beget an entire universe of cryptocurrencies.
After the great Bitcoin crash in early 2008, many potential investors became gun-shy about investing in cryptocurrencies in the future. And even though a large number of businesses and private individuals still seem to be apprehensive about the adoption of cryptocurrency, recent surges in Bitcoin’s value has been successful in garnering the attention of many prospective and existing customers. This can be confirmed by the fact that bitcoin users have more than quadrupled just over the past three years.
Only last week, Bitcoin recorded an all-time high by trading at $40,000 per unit. This represented a growth of approximately 450% in just one year.
This comes as no surprise, however, as Bitcoin’s price has continued to skyrocket over the last year. And in its wake, plenty of coin creators and would-be investors have been getting in on the action. There has even been the talk of Bitcoin rivaling gold.
But are the price surges the only reason for bitcoin’s continued popularity or are there other factors affecting the decision behind investment in bitcoin? Here are 5 reasons why this cryptocurrency has been all the buzz recently:
Bitcoin uses blockchain technology which essentially means that there is no third-party involvement and the entire transaction system for the cryptocurrency is purely peer-to-peer. This allows users a greater degree of freedom than would be experienced by the use of modern fiat money.
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This also results in lower transaction costs in the transfer of money.
Being the most popular cryptocurrency, Bitcoin enjoys far greater liquidity than its respective peers. It is perhaps one of the most liquid investment assets resulting from the recent establishment of trading platforms, exchanges, and online brokerages.
In contrast, many other cryptocurrencies cannot be exchanged directly for fiat money or tend to lose substantial value during the exchange.
Hence, the high liquidity characteristic of bitcoin makes it a great investment vessel for traders looking to make a short-term profit.
It is a well-known fact that the value of traditional currencies is subject to inflation. As a result, fiat money faces a drop in its value over time. However, Bitcoin conforms to no such rules.
As a part of its design, there can ever only be a limited amount of Bitcoins in existence, which is 21 Million. This was a conscious decision made by Satoshi Nakamoto, the anonymous entity behind the invention of Bitcoin.
This cap of 21 Million effectively makes Bitcoin inflation-resistant and allows it to retain its value, giving it superiority over traditional fiat currencies.
The limit also means that the more people buy and use it, the higher its demand will be as there will only ever be 21 Million of these in existence. And as the coins become scarce, their value will further drive upwards.
Increase In Trading Platforms
Another prime reason for the growing popularity of Bitcoin is the availability of trading platforms. These allow traders to profit from the changing dynamics of the crypto space. Artificial Intelligence (AI) and Machine Learning (ML) algorithms are used by such platforms in order to profit from the volatility of the market.
For example, if you invest in bitcoin lifestyle you can make you passively generate a good many dollars daily, depending on how favorable the market conditions are.
The benefit of having such trading platforms, apps, and software is that they use state of the art technologies and allow you to earn profits without the need for being an active trader. In fact, they help you carry on with your cryptocurrency investments as a side hustle.
Easy Availability and Acceptability
Bitcoin requires minimal elements to carry out a transaction. All you will require is a smartphone along with an internet connection which makes it an easy and fast alternative to traditional money.
A number of payment companies, PayPal and Square for example, now allow users to trade Bitcoin as a means of payment.
Not only that but many major chains such as Microsoft, Wikipedia, KFC, Burger King have now started accepting bitcoin which is a major step towards its establishment as a currency.
CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com