If at the most difficult stage of the initial round of the bull market recovery, someone tells you to abandon stocks, forget about commodities, leave fixed income assets behind, and start with an unknown digital token (the leading cryptocurrency leader), and then As it grows beyond your wildest dreams, you must think these people are crazy, right?
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Born from the ashes of the financial crisis, Bitcoin was created as a way to bypass the banks and government agencies that have plunged into the worst disaster on Wall Street for decades. In the beginning, it broke through very slowly and was caught in negative news related to fraud, theft, and fraud. These scandals have discouraged many and brought stricter regulatory scrutiny. But once it became mainstream, it proved itself to be the best performing asset in the past decade.
According to data compiled by Bloomberg, the price of this largest digital coin by market value is currently $ 7,200, an increase of more than 9,000,000% since July 2010. Peter Atwater, President of Financial Insyghts and an adjunct professor at William & Mary College in Williamsburg, Virginia, said:
"Bitcoin really captures the enthusiastic technical enthusiasm that thinks this time is different."
Even after a sharp rise and the subsequent super crash, Bitcoin's performance over the past 10 years has left all other assets behind. For those staunch long-term holders (HODLer) who have experienced the ups and downs of Bitcoin, Bitcoin has brought them huge wealth, even though it continues to be emulated by so-called quick-to-rich projects. For some, the endless illusion that bitcoin can bring lucrative returns still helps bitcoin maintain its strong momentum.
No asset can match Bitcoin. The S & P 500 index has only tripled in the same period. An index that tracks global markets more than doubled. Gold rose 25%. Some of the best-performing stocks in the Russell 3000, including Exact Sciences Corp. and Intelligent Systems Corp., rose about 3,000%. But these gains are clearly insignificant compared to Bitcoin, one of the latest and most controversial miracles in the financial world.
This huge return partly reflects the logic behind Bitcoin's take-off: when a person named Satoshi Nakamoto launched Bitcoin on Halloween in 2008, the token was worthless at the time. It is designed as an exchange method that can be sent electronically between users around the world, but without a centralized control network. Instead, Bitcoin runs on a network of computers that record all transactions on the blockchain ledger. For many, this technology is enough to justify their acceptance.
On the other side of the equation are Bitcoin's loyal fans, who see Bitcoin technology as a promising way to change the global financial system. Alex Mashinsky, founder of the crypto lending platform Celsius Network, said:
"This is the first real separation, just like the separation of church and state, which separates currency from state. This is innovation, this is excitement."
However, Bitcoin has developed slowly, and the first transaction was completed two years after its birth. Someone used it to buy two pizzas. Since then, the price of the earliest digital tokens has soared all the way, many times, and hundreds of thousands of imitators have appeared in competition, but their fate is different.
Many of the early adopters of Bitcoin are its loyal fans, watching as it has gone through a cycle of ups and downs with almost nothing in the past decade.
In early 2017, Bitcoin broke through $ 1,000. By midsummer, that number had more than doubled. The madness was released. By the end of the same year, the number had hovered above $ 14,000. But it goes up and down as fast as it goes up, or even faster. By the end of 2018, the price of Bitcoin barely remained above $ 3,000. However, shortly after the crash, it started another round of sharp gains, this time reaching a high of $ 13,800 in the summer of 2019. ProChain Capital President David Tawil commented:
"Of course, digital is the place to attract investors. Based on completely different factors from the first phase, Bitcoin will start a completely different growth phase in the next 10 years."
Although Bitcoin brings a lot of wealth to speculators and some thieves, its survival will depend on further adoption of it. It is not currently widely used as a medium of exchange. Some large retailers are accepting bitcoin payments, but it has not been as popular as many predicted. The scam is still rampant. Investor interest is waning, and the level of integration between Bitcoin giant whales is higher than in the worst of the 2017 bubble, which means that their influence on prices may be increasing.
Forecasts for the next decade are everywhere. Some believe that the next decade of 2020 will witness massive adoption of Bitcoin. Blockchain technology will bring about change and solve any problem in the world. On the other hand, as central banks around the world are paying closer attention to the crypto space than ever before, regulatory reviews may strengthen.
From a more recent perspective, some speculators predict that given the halving of Bitcoin in 2020 (referring to a 50% reduction in the number of Bitcoin rewards paid to miners who process transactions), volatility in 2020 may not be that great . The halving will take place in May 2020 (the Internet is full of countdown clocks). About four years ago, the last halving of Bitcoin coincided with an increase in its price, which convinced many cryptocurrency believers that history would repeat itself.
For Andy Bromberg of CoinList, the halving market has been digested. The co-founder and president said in an interview:
"Maybe the market has been overvalued because everyone believes in this theory and buys heavily, and we will see prices fall after halving. This will not shock me."
But he said that after next year, "Bitcoin will find its narrative as digital gold. It feels like this narrative is heating up and is developing independently. I define the success of most crypto assets as being able to do this."