The cryptocurrency fever is going viral day by day. The interest in digital money is fueled by media, especially when a significant change in a coin’s value takes place. This is the main reason why the rapidly growing market of various digital assets attracts so many investors.
The most well-known cryptocurrency is Bitcoin - if you hadn’t been living under a rock so far, you might have heard about it. Bitcoin appeared in 2009 and started functioning as a payment method in a year. Although it was recognized as the world's top performing currency in 2015 and 2016, the investors and developers alike started putting their hopes on it only in 2017 when the Bitcoin price reached its climax.
What Is Happening to Bitcoin Now?
2018 burst into the lives of Bitcoin investors as their biggest nightmare. Bitcoin began decreasing in value at a rapid pace and lost over 50% by the end of January 2018. One of the reasons for that was a ban of anonymous cryptocurrency trading in South Korea. However, there were guesses that this drastic price drop, as well as other previous changes in Bitcoin’s value, was just the case of market manipulation.
Despite all the hurdles Bitcoin has been overcoming recently, it shows the signs of slow and stable recovery. At the moment of writing, on September 5, the price of Bitcoin is hovering around $7,000.
Will Bitcoin Grow Further?
There are several factors that might drive the price of Bitcoin up - no other cryptocurrency is accepted, exchanged, and sold as widely as it is.
Demand
Bitcoin is a selling topic for most news outlets and financial magazines. With cryptocurrency making headlines on a regular basis, it becomes increasingly hard to find a person who doesn’t know about the “innovative form of money that disrupts industries”. No wonder, many newcomer investors around the world want a piece of Bitcoin’s action. That said, the demand for Bitcoin will probably only grow for another five years.
Acceptance
Bitcoin is already accepted by a number of big-name retailers such as Microsoft or Overstock, and it’s only a matter of time until other companies follow suit and the industry expands further. Even today there are thousands of businesses, both online and land-based, that offer you to use Bitcoin as a legal payment method.
Investment appeal
You can also think of Bitcoin as the new gold since it is highly popular as an investment tool rather than a currency for daily payments. Many investors bet on Bitcoin because of its volatile nature, hoping to reap the benefits of the price spikes.
Decentralization
Bitcoin can still attract people by being decentralized and therefore considered as more trustworthy. While there are hacker attacks on Bitcoin exchanges and online crypto storages, centralized financial institutions and payment systems are way more vulnerable.
Upgrades
To ensure safety and make the protocol work better, Bitcoin is constantly updating and implementing new features, such as SegWit and Lightning Network.
Popularity Among the Young
Representatives of a so-called Generation-Y are more involved with digital technologies, and thus they are more inclined to become the early adopters of cryptocurrencies.
In fact, 56% of millennials report they are among the first to try new technologies. Top it all, according to the survey conducted by Harris Poll, 30% of the young prefer digital currency over government bonds. The growing popularity of Bitcoin among millennials can further result in better awareness and engagement of older generations as well.
Looming ETF Adoption
If you are somehow involved in the stock market, then you might be familiar with ETFs. ETF is an exchange-traded fund that helps investors to easily buy and sell financial assets in the form of stocks. When translated to Bitcoin, the ETF might become a ‘meeting ground’ for institutional investors and cryptocurrency. The inflow of fresh money will undoubtedly revitalize the cryptocurrency industry in general and open up new perspectives for Bitcoin as a trusted and reliable asset.
The number of initiatives in launching Bitcoin ETFs is growing. However, for these ETFs to break through, they might be approved by the SEC first. What's the hitch, then? Thus far, all Bitcoin ETF proposals were rejected as they do not fit in the prevailing financial framework.
Only Time Will Tell
The high volatility of Bitcoin shows that it’s very difficult to forecast its exchange rate or further changes. To make predictions, experts take data from the market stats of the previous years and look for patterns that repeat themselves. However, such forecasts can still be rough and unrealistic. The price of Bitcoin is affected by a huge number of factors that are nigh impossible to specify ahead.
One such factor is cryptocurrency regulation. In terms of legislation, there are still no clear laws for crypto-related activities in most countries. Still, more regulations are expected to be established in the near future. There’s a possibility that some governments will ban crypto, or, conversely, the countries where it’s illegal at the moment will lift the ban.
The cryptocurrency market is still in its infancy and faces a lot of problems. And whether the crypto world and traditional financial institutions will find a way to co-exist in a mutually advantageous cooperation remains to be seen.