Just a decade or so ago, the term “Bitcoin” was one that was on very few people’s lips. These days, however, it’s something that practically everyone in the financial sector has heard of. It’s become something of a byword for financial modernisation and offers traders a whole range of benefits – not least the potential for profits. It is, however, also a volatile cryptocurrency with a not-insignificant amount of risk attached.

So just how did Bitcoin manage to become so mainstream? And why have so many people stuck with this volatile cryptocurrency even through a period of major market upheaval? 

Bitcoin’s ascent to the top

There are lots of different reasons why Bitcoin has managed to succeed so far. One of these is timing. The cryptocurrency was well under development prior to the start of the financial crisis: it dates back to 2009 officially, although the technology was being created before then. But after the financial crisis, there was a renewed sense among some investors that traditional investment products ought to be left behind. 

Many people lost large amounts of money during the crash, and there was also a sense among some that the government was in part to blame. Bitcoin – with its decentralised administration, high levels of privacy and seemingly limitless potential and promise – was considered by some in the post-2008 world to be the perfect alternative to investing in typical markets.

But there are other reasons, too. Investing in Bitcoin is a highly private act, at least compared to equivalents in fiat markets such as buying stocks. Information provider Forex Fraud makes clear that there are some risks involved in crypto trading, but it also shows that safe crypto trading is possible – as is private trading.

There is far less information required of a buyer when they are going through a decentralised network such as the Bitcoin ledger, which gives those who need an added layer of privacy the comfort they need to get involved. Other cryptocurrencies have since sprung up, and many of these meet the same need – but Bitcoin’s position as the most famous, and also one of the most valuable, has ensured it remains at the top.

Why is it still so valuable? 

In many ways, it’s harder to answer the question of why Bitcoin remains so popular in the modern day. The financial markets have taken serious shocks in the last few years, not least the enormous wave of trouble that came as a result of the coronavirus pandemic. Bitcoin itself hasn’t been immune to price volatility. On some occasions, its price has dropped by 30% in a single day – and this sort of dip is often caused because of factors like relative lack of supply and the absence of a central bank to stabilise it in the way that a fiat currency might have. 

But despite all these external shocks, Bitcoin has continued to be snapped up by crypto investors. Price volatility itself appears to have played a role. While on the face of it this might put some investors off, it appears to have had the opposite effect with Bitcoin. The major swings in the Bitcoin price that have occurred recently have caused losses, but they have also, in some cases, caused gains. The big rises seen in 2017 and even in recent days are likely to have fuelled the hopes of investors looking to record a profit, especially if they are able to keep their positions open and ride out any price dips. 

Hype has also played a part. Bitcoin continues to be celebrated across the financial media as an example of an innovative cryptocurrency that could well be the future of money. This perception is then bolstered when big blue-chip firms take up cryptocurrency and start using it as a means of corporate value exchange. That kind of signal can play a big role in investor confidence – and help keep demand for Bitcoin high. 

Ultimately, the reasons for Bitcoin’s ascent to its current position are complex and varied. It got there in part due to the privacy levels it offers, while its popularity was also in some ways a product of the financial crisis and subsequent desires to invest in so-called alternative financial products. Why it remains so valuable is a harder question to answer, although it’s clear that price rises, and hype played a role. Overall, exactly why Bitcoin remains so popular is one for the history books.

(Excerpt) Read more Here | 2021-09-22 12:11:03
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