Bitcoin As An Investment- How Sound Is it?
Investing is changing. It’s a digital world that we find ourselves in and with that comes new ways of buying, shopping and generally paying for things we purchase every day. In the past, it’s been known as volatile and unpredictable, but the truth is Bitcoin has been one of the strongest performers of the last decade.
Even this year Bitcoin has shown that although it may go up and down sporadically, it always levels out and shows an overall increase compared to what it was before the storm. BTC hit a low this year in March but since then, its value is up 300% and has reached prices higher than it’s seen since 2017. In that year, investors saw an incredible return of 1,350%. But it has certainly been a bumpy ride. In 2018 Bitcoin dropped 70% in value from $14,000 to $4,000. But the fact that the currency has had its fair share of flux hasn’t seemed to deter believers and the currency has once again risen to new heights. When it comes to Bitcoin, it’s new, bold, and will keep you on the edge of your seat.
How Has It Changed Over The Years?
As we mentioned before, the world is changing at a stunning rate. It could be said that the younger generations who have grown up surrounded by the magic of modern technology are the ones who have a slight advantage in many ways. As more and more things become automated, people are also slowly moving towards new ways of securing their finances, making transactions, and maintaining complete privacy whilst doing so. All these things are on the path to acceleration as Bitcoin becomes more and more accepted in other corners of the world. The world is adopting Bitcoin.
“Wallets” are just that, but for cryptocurrency. It’s an app that allows you to buy/sell/spend Bitcoin. One of the most popular Wallets on the market is Blockchain. The company has reported that there has been an increase in wallet downloads from 43 million to 58 million in the last year. Other services like the Cash App, PayPal, or Coinbase are also popular wallets or investment tools and the Cash App has seen a sharp rise in Bitcoin revenue to $1.63 billion. Meanwhile, PayPal has announced that its 26 million merchant accounts will be able to accept any cryptocurrency as payment in early 2021. These numbers should make it quite clear that there is a strong future ahead for cryptocurrency.
Bitcoin: It's Past Concerns And Its Future Resolutions
One needs to look past the volatile rises and falls of the investment and instead look at the fact that after the manic highs and deep lows, the currency always seems to find an increase in its value before the rise and fall. With a market cap that has steadily increased from $1B to $100B in the last 10 years, Bitcoin seems to have proven that it is an asset determined to increase its worth.
Initially worried about the impact of cryptocurrencies, many governments have since found ways to regulate the use of the currency. In Europe, the EU has laid out a plan for countries to compile databases of wallet users and their identities. They saw that there would be a need for Financial Intelligence Users to access these databases for safety reasons. Now, crypto wallets must adhere to the same requirements as banks and must register with financial and tax authorities. This move into the mainstream is likely to continue to make Bitcoin even more trusted in the public eye.
Bitcoin has been even more legitimized in Australia it seems. The currency has been granted an Australian Financial Services license and/or an AFS license. This is required to conduct a financial services business and with this, they are now allowed to do things like providing financial product advice, deal in financial products, make a market for financial products and provide a custodial or depository service. In short, an AFS license allows them to conduct a financial services business, like any bank. The application for an AFS license was reviewed by the Australian Securities and Investments Commission and granted. Bitcoin is as legitimate as cash.
What Lies In Store For The Digital Market?
As we progress, we’ll see BTC continue to climb to the point it might become even more trusted than cash. Buying Bitcoin is different from traditional investing. Instead of buying stock in a company an investor is buying into a fund. Satoshi Nakamoto, the founder of Bitcoin, had this to say about the problem with traditional forms of currency.
“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.”
In summary, Bitcoin has evolved from a subculture niche investment fad to a globally accepted and regulated currency that is available on medium wallet apps. These apps make it simple to buy, manage, sell, and spend with BTC and soon enough, merchants all over will be accepting BTC as transactional payment. Even though it has been known to plummet and shoot up, the value in BTC has increased steadily over the past 10 years. With huge privacy and safety benefits, BTC is starting to feel more and more like the currency of the future.
About Cosmos Energy: Cosmos Energy Group (Cosmos) is an Australian based digital asset infrastructure business. We are focused on the identification, acquisition and use of stranded or distressed energy assets, through co-location of flexible data centres. Cosmos currently deploys ASIC hardward primarily focused on Bitcoin mining in these data centres throughout the USA.
About James Manning: James Manning is the Founder of Cosmos Energy Group. Based in Sydney, Australia he is has a background in accounting and finance. When he isn’t busy mining for Bitcoin, James is searching for value adding opportunities in emerging technology.