Understand the Bitcoin Bull Run
When Bitcoin was first made available to the public in 2009, its value could not be determined. The first transaction that assigned monetary value to the cryptocurrency happened in 2010 when someone paid 10,000 BTC for 2 pizzas. Since then, Bitcoin has had an exciting history and has asserted its place in the cryptocurrency order against competitors. The first successful altcoin, Namecoin, was launched in 2011, but that didn’t stop Bitcoin from gaining in value. 2 years later, in 2013, Bitcoin hit $ 1,000 for the first time before crashing to $ 300. It would take 3 years to recover.
As Bitcoin rebuilt in the middle of the decade, a growing number of institutions, banks, and fintech institutions agreed to accept crypto and blockchain. This improved access has helped make Bitcoin’s reputation mainstream. In 2017, Bitcoin’s price jumped from under $ 1,000 to over $ 19,000. Unfortunately this did not last; the US accused two cryptocurrencies of manipulating the value of Bitcoin, and the SEC was tracking Initial Coin Offerings (ICOs) as unregistered securities, suggesting an unfavorable regulatory environment for cryptocurrency. Bitcoin’s value fell 70% again over the course of 2018, but this time it recovered faster. In 2019, Bitcoin even outperformed the best stocks on the market. When the COVID-19 pandemic slowed the global economy a year later, Bitcoin was ready to offer high returns to any risk-taking investor.
For many, this risk has paid off so far. In April 2021, Bitcoin hit an all-time high of over $ 65.00. More than just speculation, Bitcoin’s surge is fueled by fears of inflation in the US dollar. More than 20% of all dollars in circulation were printed in 2020, but the supply of bitcoins is limited. To keep supply down, Bitcoin halves the reward Bitcoin miners are given for processing transactions every 4 years, the last of which was in May 2020.
In addition, the regulatory environment in many countries has warmed up towards cryptocurrencies in recent years. The auditor’s office has given banks permission to hold crypto on behalf of customers, and numerous central banks are reviewing the digital currency after watching China’s moves in the same direction. These moves have led large US companies to invest heavily in Bitcoin. Tesla recently bought $ 1.5 billion worth of bitcoin and vowed to accept bitcoin as payment for its products. Apple Pay also started accepting BitPay, a prepaid MasterCard powered by Bitcoin. Bitcoin can now be used anywhere MasterCard is accepted.
As cryptocurrencies become more popular, so do the costs of mining and maintaining the system. In 2018, crypto mining accounted for 1% of global energy consumption. Two years later, Bitcoin alone was consuming 120 gigawatts per second. This corresponds to the output of 49,440 wind turbines operating at the same time. While crypto offers the world many unique benefits, it doesn’t come without its drawbacks. Knowledgeable investors should understand both before making a decision. Wild successes exist for those who tolerate great risks.
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