The most popular cryptocurrency bitcoin has continued to hit a record rise having broken through $50,000 last week. On Sunday, the bitcoin hit another top height by raising above $58,000 as it continues its strong momentum this year.
This, not the first or second time the cryptocurrency has risen more than 90% since the start of this year which resulted in pushing its total market value above $1.
The most recent projection was enhanced by Tesla and other big shot companies accepting it as payment. Bitcoin has a track record of wild price swings and has fallen sharply several times since it was created in 2009.
Bitcoin Hitting New Heights Since Tesla Aids.
On the other hand, there are a huge number of comments and statements comes about the explosive growth of bitcoin. There is some opinion that unlike other commodities, however, Bitcoin cannot be used for anything else, merely bought and sold. This has made attempts to value it difficult.
Pricing is also susceptible to large swings because of the limited number which is traded. Many supporters are holding on to them in anticipation of higher valuations. Should they all sell at once, the price could tumble.
With no intrinsic value, unlike a physical asset such as land, and no ability to generate an income, unlike a company or bond, cryptocurrencies are extremely volatile and can crash as fast as they rise.
Critics point out that while Bitcoin may have a finite supply of units – 21 million – the number of cryptocurrencies is ever-growing and potentially limitless. Some popular statements also claim that people have lost large amounts of money in steep drops in the value of cryptocurrencies and hacks and scams associated with them.
Britain’s financial watchdog, the Financial Conduct Authority (FCA), opened 52 investigations into suspected cryptocurrency frauds in the year to 30 June 2020, according to a Freedom of Information request from law firm RPC.
According to figures from cryptocurrency news site CoinDesk, the beginning bitcoin in this year was roughly $28,900. At a sudden time, it hits the $40,000 mark in early January, and it continues triggering a downward trend that saw it drop to around $30,000 by the end of the month.
Later having passed $50,000 in the middle of February it never has to look behind and continued its up race by reaching $58,000 on Sunday.
This bitcoin race made the large and big shot companies adopt it as a method of payment. In addition to this Elon musk revealed last week his electric carmaker Tesla had brought $1.5bn worth of bitcoin and would be accepting it as payment for its cars in the future.
It is obvious that Elon’s action has spread confidence for companies like MasterCard who also plan to accept bitcoin as a form of payment while Blackrock who is the world’s largest asset manager recently explored ways it can use the digital currency.
A New York-based foreign-exchange firm Oanda analyst Mr. Craig Erlam opinioned that “Who’s next and what will tip over the edge and trigger the next surge?”
It is a fact that the global pandemic has also played a vital role in the price hike of bitcoin since more people preferred to shop online than offline due to the lockdown. It’s also a fact that some critics have argued: “bitcoin is less of a currency and more of a speculative trading tool that is open to market manipulation”.
Economical pioneer Nouriel Roubini has opinioned that it has very little practical use and will not provide a steady flow income like a bond or share. He also made a tweet against Elon musk’s action by saying “Elon Musk may be buying it but that doesn’t mean everyone else should follow suit, “he tweeted recently.
The founder of cryptocurrency rating Evai Mr. Matt Dixon stated that Novice investors still need to be aware of the risks involved. He also commented about January’s slide from $40,000 to $30,000 that “though undoubtedly panic-including for the uninitiated, this is not anything particularly remarkable for long-term holders”.
He also added that “New investors need to ensure their hands remain steady to avoid any undue loss from bitcoin’s regular shakeouts. The upside potential may be vast, but the risks can be just as high.”
Kurt Wuckert who accepted bitcoins in 2012 as a payment for a small side project later become a long-term bitcoin investor. He shared his experience that “I agreed to accept the bitcoin fully expecting to be some kind of video game tokens or something but decided to be cool about it.
Then I got to read about it online and doing my research.” He later turned to be a regular investor in cryptocurrency after his research. He also gave a piece of free advice for the people who are into this that they should do their research before jumping into the bitcoin rollercoaster.
“To this day, I tell curious friends to set aside their beer money but not their rent money because it is what I have always done,” He said.