Why Bitcoin is worth believing and investing like in securities

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

The life hacker understands why experts advise betting on cryptocurrencies.

Bitcoin is a cryptocurrency that can be used for P2P payments (Peer-to-Peer - from person to person) without the participation of intermediaries, which in this case are banks. Blockchain (a digital filing cabinet where data on all transactions are recorded) is today called a promising financial technology.

It is possible that one day bitcoin will replace the dollar as the world's reserve currency. It is unlikely that this will happen in the near future. However, experts are confident that the value of bitcoins will continue to rise. And the reason for this is faith.

The more people believe that bitcoin is a legal and legal currency, the higher its value will rise.

Over the past two months, the value of bitcoin has jumped from $ 1,250 (end of April) to $ 2,962 (June 11). A year ago, this digital currency was worth $ 587. And here's how much Bitcoin is worth now.

But the bitcoin rate was not always pleasing. Looking at this graph, one can imagine the excitement of the owners of the cryptocurrency when its rate fell by 50% or more.

Bitcoins are indistinguishable from any other risky asset, for example from securities, the specific return of which is unknown. And buying them is no more speculative than buying shares. In addition, it is no secret to anyone that the price of securities of some successful companies is experiencing significant fluctuations.

It can be argued that companies usually generate income while Bitcoin does not. But, as with cryptocurrency, faith is also essential in this case. Which prediction has a better chance of coming true: that the company's revenue will grow X percent per year for ten years, or that Bitcoin will continue to grow its user base? Both of these models are based on belief and assumption.

A significant portion of the value of most high-tech companies comes from the expected cash flows that could be generated in a few decades. Uber's future is based on a long-term self-driving car project. Therefore, as with Bitcoin, the most risky assets require faith.

As of June 26:

• Total mined - 16 million out of 21 million bitcoins.
• The value of the deals is $ 154,277,054.
• The number of transactions is 211,806.
• The total income of miners is $ 4,679,278.
• The average market price on the leading cryptocurrency exchanges is $ 2,506.89.