This is a big question in many people’s minds across the world right now. Many are interested in knowing more about Bitcoin, what it is, what we can use it for, and most importantly, why is it so expensive? These are all valid questions and with so much being spoken about in the media about Bitcoin, it’s definitely something worth looking into.
What is Bitcoin?
Bitcoin is the creation of an anonymous group or person “Satoshi Nakamoto”, who developed the code and created this cryptocurrency. No one knows if Satoshi is an individual or a group of individuals and what the reason was for creating Bitcoin.
It’s hard to say but many people who have speculated have said that the reason for this cryptocurrency was to give people a safer option in making payments to others, especially digitally. The system is designed to authenticate all transactions and transfer ownership of the cryptocurrency to the provider of the service. The system knows exactly which Bitcoin is going where and from which owner, making sure that everything is valid. The blockchain technology that is embedded into the cryptocurrency adds another layer of protection so no-one can steal the coins by using this method, which is a huge advantage for its investors and users.
Why is Bitcoin so valuable?
The reason why Bitcoin is so valuable is due to some key factors. The first is the fact that Bitcoin is finite and there will only be a limited number that will ever be created so scarcity is part of the reason. Another big reason for its huge value is that Bitcoin is not connected to any country’s economy or controlled and regulated by any country so the value will never be affected by how a country changes regulations or economic policies so investors feel safe to invest in Bitcoin. Another simple reason is due to the fact demand is high and the scarcity of Bitcoin allows for those who own it to charge more to those that want to buy it.
Over the last few years we have also seen Bitcoin become more acceptable with more and more companies accepting this as a valid payment method which means that people can use this as a legitimate currency to make payments for services. A famous example of this is Tesla who have publicly said they will accept Bitcoin for any car purchase. This should not be a big surprise as Tesla is very much into technology and in particular, cryptocurrency.
Who invests in Bitcoin?
There are now a diverse number of investors that trade in cryptocurrency from professionals to institutions and even beginners. They are all looking to profit from Bitcoin and are all looking at the trends and behaviour of the market. Many investors are now using Bitcoin and other cryptocurrencies as leverage for their investments and are following one of the core rules in investing diversification. Diversification of the portfolio allows investors to minimise loss from their investment by spreading their investing in different industries, sectors and companies so this means that if one is doing badly others will compensate for the loss. If you want to buy crypto stocks online for the cheapest price, go to this website https://kryptoszene.de/aktien-kaufen/. The site instructs you on where to get low-cost stocks and what to look for when purchasing stocks.
Bitcoin has been one of their diversification investments and has been a very profitable one. 2021 has been the best performance for Bitcoin with the price for one Bitcoin reaching over $60000 which has surpassed its previous best in 2016 that reached over $40000. As the price of Bitcoin has brought great returns, it means that more and more investors are willing to invest with pension funds and mutual funds that have started to get involved. This is a great sign as their usual strategy for investment is long term with low risk so they only invest for long term returns. This has now shaped the way that other investors see cryptocurrencies and will have a massive impact on Bitcoin’s future.
How can I buy Bitcoin?
Bitcoin and other cryptocurrencies have become easier than ever to buy and sell. There have been numerous exchanges that have come into the market giving everyone the opportunity to get involved. There are big exchange platforms such as eToro where you can trade on many financial products, to Robinhood who has recently come to fame for being able to help the average investor. There have also been very specialised platforms like Coinbase that were created specifically to trade with cryptocurrencies. This platform went public in 2021 and was valued at over $47 billion adding to the craze of Cryptocurrencies.
Governments such as the Canadian, US and UK have authorised cryptocurrencies trading by issuing licences to trading platforms so investors can trade in a secure environment. This has further helped cryptocurrencies become more legit in the eyes of the investors which has also helped the industry implement and follow a certain level of standard to provide a professional service. Online manuals such as How to buy cryptocurrency guide 2021 can assist you in purchasing cryptocurrency in certain nations such as the United Kingdom, making traders’ tasks more easier.
We can see how Bitcoin has become influential to the financial market and also to investor strategies. We should all look at this as an opportunity to get involved and even start investing so we can look at earning some additional income and secure a better future for ourselves and our family.