Why Bitcoin Is Unstoppable?

Why bitcoin is unstoppable

Bitcoin enjoyed an extraordinary year of success in 2017; over the course of a hectic twelve-month period, this father and mother of cryptocurrencies saw its price increase ten-fold, from $1,000 to $13,000. This came amid a welter of positive publicity, endorsements from leading figures in many fields and widespread advertising campaigns for it and for other digital currencies. The word ‘unstoppable’ was often quoted and it seemed, at least in the short term that this would indeed be the case. If anything, the prospects for 2018 looked even rosier for bitcoin, with the event of investors of an institutional level appearing, second stage solutions and merchant adoption in the offing; the news that both NASDAQ and the Chicago Mercantile Exchange were about to start offering bitcoin futures was only one example of the good times that the future seemed to hold for the world’s leading cryptocurrency. Taking all these factors into account, it was easy to understand the enthusiasm that swept the investing public. Many people made their first investments in bitcoin on the FOMO principle, which means the Fear Of Missing Out, and it was easy to see why. They merely had to look at those bitcoin holders who saw their investment increase its value ten-fold between January and December.

 

Yet what exactly do we mean by ‘unstoppable’? Do we mean that bitcoin’s value will continue to increase massively every year until the end of time? This seems unlikely and, in fact, not even the most hyperbolic of bitcoin’s adherents have suggested that this will be the case. In fact, most observers pointed to examples of short-term volatility even in bitcoin’s annus mirabilis. 29th November 2017 saw Bitcoin fall 20% in a few minutes, before recovering later that day. This volatility will be familiar to many of those who have invested in bitcoin as part of their portfolio; in this way the cryptocurrency functions in the manner of gold, its volatile and atypical behaviour balancing out the performance of more conventional stocks and shares. This volatility will probably not go away anytime soon and some observers wondered if 2018 might not see a significant pullback from bitcoin, as the currency fell victim to its own success.

 

Other voices of caution pointed out that the enthusiasm gripping the market was reminiscent of the dot-com boom and of other speculative bubbles. Perhaps it is with this that we can see the true nature of the unstoppable bitcoin; as a currency; that is, as a means of purchasing goods and services, a unit of account and a way of measuring debt, its volatility makes it a less than ideal commodity. However, as something in which to trade, it was, at least in 2017, a resounding success. Will this success continue indefinitely? Well, that remains to be seen, but even if there is a readjustment in the value of bitcoin, that does not mean that this most famous cryptocurrency is going to go away, at least not in the foreseeable future.

 

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