BelfricsBitcoinBitcoin BeginnersBitcoin ExchangeBitcoin News

Is Bitcoin the Way Forward or Is It a Passing Fad?

By August 30, 2017 No Comments

The gruelling debate continues as experts remain poles apart while reflecting over the future of bitcoin. Since its inception in 2009, bitcoin, the most recognized name in the cryptocurrency market, has marked the completion of 8 years in the market. However, owing to its slow adoption rate and frequent fluctuation of perceived value, investors and financial strategists consider that bitcoin still belongs to the infancy stage of its growth spectrum.
The performance of bitcoin in the real-world financial sector, however, provides a different picture. The reports indicate that bitcoin’s year-to-date trade value has skyrocketed to the $2600 margin, which is more than 200% boost in the per unit value. In contrast to such spectacular performance, other assets have experienced meager growth, such as:

  • The value of gold has increased only 9.56%
  • S&P 500 has increased only 8.73%
  • NASDAQ value is up only by 15.77%
  • The value of Dow Jones Industrials is up by 8.17%
  • The value of Russell 2000 has increased 3.49%

Despite the striking growth that bitcoin has experienced in the first-half of 2017 fiscal, it could not avoid showering skepticism from economists and strategists. They are of opinion that investors should not confuse bitcoin’s sharp rise as investors’ favorite destination for a “healthy bull run.” In support of the claim, they have cited the following reasons:

  • The hype surrounding bitcoin performance is nothing but a bubble as investors are under the impression that cryptocurrency would replace all other forms of currencies
  • Several financial institutes across the globe are using the bitcoin hype as an “investment vehicle”
  • With the presence of more number of competitors, investors will struggle to own the biggest investment, which will lead to saturation in the market

In their argument to defend bitcoin as the most appropriate domain for investment in market, cryptocurrency-friendly investors have cited the fundamental rule of demand and supply. They are of opinion that the total volume of bitcoins mined cannot exceed 21 million and it will be made available to a global population that is 7 billion strong. Quite naturally, going by the basic rule of demand and supply, the value of bitcoin will never saturate as there will be more demand than supply. Due to this factor, bitcoin will enjoy constant growth in its value and thereby, sustainability of the digital currency will be ensured. The advent of safe and secure bitcoin trading platforms such as Befrics will further strengthen user confidence, contributing to the popularity of bitcoins.
In another very recent “benchmarking study of cryptocurrency, encrypted digital currency” conducted by the Cambridge Centre for Alternative Finance (CCAF), the findings indicate that the user base of bitcoin and other types of cryptocurrencies is widening with every passing year. According to the study:

  • The total number of active wallets in the market is anything between  5.8 million and 11.5 million
  • Considering that each user has two wallets, it implies that currently 2.9 million and 5.8 million individuals use cryptocurrency
  • Owing to increasing number of enterprise participation in cryptocurrency sector, roughly 2000 employees are engaged with this industry

Researches, who conducted the study, are confident that in contrast to the popular opinion that bitcoin is “merely a passing fad or insignificant,” the data is actually proving its long-term sustainability.
Decentralized nature of payment system, seamless accessibility via smartphone and a steady internet connection and highly sophisticated Blockchain programming are the three key drivers that provide bitcoin an edge over competing assets. Moreover, bitcoin and other forms of cryptocurrencies would continue to gain prominence owing to tech savvy generation’s growing preference for digital currency. The responsibility to increase awareness among the mass, however, rests upon investors. In addition, by ensuring regulatory compliance and stopping the use of bitcoin in criminal activities, investors would be able to attract more users.

Leave a Reply