Recently the price of Bitcoin has touched the 10,000 dollar mark and with this it seems
that there is nothing that can stop the rise of this particular cryptocurrency. However, it also needs to be noted in this context that
getting out of this asset, which is supposed to highly lack in liquidity, can
be so much more difficult than getting in. In most cases, the money these days
is electronic. It is all about a series of zeroes and ones that are there on a
computer. This is why this meteoric rise of Bitcoin in the space of a year has
been so praiseworthy.
It was only in January 2017 that this privately created electronic currency was worth 1000 dollars and in the space of around 11 months it has added another zero to its price.
Controversy
During this journey there has been plenty of controversy as
well. In fact, it has been called a fraud by Jamie Dimon, who heads JPMorganChase. It has also been labeled a “gigantic speculative bubble” by an economist
named Nouriel Roubini. It is this rapid rise of Bitcoin that has tempted many
an ordinary investor to put in their hard earned money over here.
This phenomenon has also been called FOMO or the fear of missing out. It has also received support of sorts from the NASDAQ stockexchange and the Chicago Mercantile Exchange, which happens to be the biggest futures market of the United States of America (USA). Both of them have decided to add bitcoin-futures contracts to their list of imprimaturs.
Mixing up separate issues
Normally, it is rather easy to mix up issues that should
otherwise be kept separate. The first thing to be considered in this case is
whether blockchain will be accepted more widely. Blockchain is one of the components
that form the basis of bitcoin technology.
It can also be described as distributed ledgers that record various transactions in a much safer manner. As such, it could prove to be highly useful in several areas of finance and beyond as well. The second important point that needs to be noted in this case this electronic currency will be adopted to a greater extent in our regular lives. It has to be stated in this particular currency that the evidence in favor of it being used to a greater extent in our lives is not that strong.
What can you use Bitcoin for?
Bitcoin can be used to buy several things.
The currency has three major functions. You can
use it to store value, as a unit of account, and as a means of exchange. Bitcoin
is highly volatile. It fell by 20 per cent within a few minutes on 29 November
before it rebounded. This really compromised its position as a mean of exchange
as well as store of value. For example, people who bought iPhone X by using
Bitcoins during January could now buy 10 such phones with the currency. This
way they could have bought Christmas gifts for their entire family.