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The Bitcoin Mania

The US financial crisis of 2008 began earlier because of cheap credit. When the bubble burst, however, investments worth a trillion dollars (USD) were left as worthless subprime mortgage funds. This caused widespread panic, prompting the development of Bitcoin (BTC), an alternative digital currency. BTC is a digital currency focused on blockchain technology. It is regarded as the ideal type of money for the internet because it is swift, safe, and borderless. On August 18, 2008, Satoshi Nakamoto, the bitcoin's unknown creator, unveiled the official bitcoin website ( Bitcoin's rise is breaking records, but many retail investors are still hesitant to invest in bitcoin or any cryptocurrency for that matter. Let us take a closer look at what causes these worries and what bitcoin's future holds.

Despite the global pandemic wreaking havoc on all the significant economies, bitcoin has been a survivor. BTC’s value has increased by 400% in just six months, from Rs. 6,00,000 to Rs. 25,00,000. As the first and biggest cryptocurrency, BTC is expected to rise at an exponential rate. However, owing to its unpredictable nature, its rise has not been particularly smooth. BTC's first price increase came in 2010 when the price of one coin rose from $0.0008 to $0.08, and it has since seen many rallies and crashes. There are several factors responsible for this.

First, BTC is also a volatile and perhaps untrustworthy currency. People are constantly afraid that it will be outlawed by the government at any stage. When it’s surrounded by negative news, its worth plummets even more. Mt Gox, for example, declared bankruptcy in 2014. Mt Gox was a business that approved cryptocurrency as payment for its quarter.

In addition, security has been one of the major concerns while investing in crypto. Many people have complained about their digital asset being hacked and stolen. In April 2014, OpenSSL vulnerability attacked by the Heartbleed bug drove BTC prices down by 10% in a month.

Finally, BTC leads to illegal practices such as wash trading, a method of market manipulation by a party that buys and sells the same assets to inflate its trading volumes and to appear legitimate. The rise in BTC worth is also said to be manipulative rather than just being coincidental. However, wash trading activities have lessened since the year 2019, which may lower the price fluctuation.

Let us now consider the prospects of BTC. It experienced a price drop last month as a result of its instability, but investors hoped that these were just short-term setbacks that would be offset by the stock's future valuation. Chamath Palihapitiya, the founder and CEO of Social Capital, claims that BTC will rise to $100K, $200K, and then $250K.

Cryptocurrencies must now be robust and usable to be considered alternative currencies. Since JP Morgan Chase and Tesla stated that they will allow cryptocurrency for a limited number of operations, the value of cryptos has increased sharply. Also, PayPal has very recently launched its feature to buy or sell Cryptos. This is called institutional adoption. Many new platforms that allow cryptocurrency investing have also been launched recently. BTC’s low supply and high demand is another reason for its rise: BTC is a fixed currency, so there's only $21 million of them and they can only be mined up to that amount. Thus, as a result of their growing institutional penetration and high demand, digital currencies will see their value increase in the long run.


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