Bitcoin started at about $8,000 a unit, and it decreased to $5,000 a unit in March 2020. After suffering a slump in December 2020, Bitcoin bounced back and was priced at $20,632, a record-number high for the cryptocurrency.
And since then, it has not stopped growing. In January 2021, you can buy or sell one Bitcoin for $41,000.
The numbers are impressive, but this is not the first time Bitcoin got this much value. Back in 2017, cryptocurrency was what everyone was talking about.
Fueling the craze surrounding it were ICO or initial coin offering which funded self-styled startups as they peddled to the public tokens of cryptocurrency, which provided services as soon as their projects were completed.
Despite announcing their plans to the public in an unexpected turn of events, many of those self-styled startups never built their projects. Instead, their tokens ended up being traded and speculated upon at swinging prices on unregulated online marketplaces.
Bitcoin, and another cryptocurrency Ethereum, was usually used to purchase tokens, rallying a very high demand. In 2017, cryptocurrency skyrocketed to $19,783, which was the highest number at the time, before it crashed down and stayed down for a while.
Several ICO promoters were even prosecuted by the US Securities and Exchange Commission as they classified opined tokens as unregistered securities.
So is the market seeing a redo of 2017? Most likely not, as the situation this time is different.
Even though Bitcoin can be purchased and sold at $41,000 now, the once enthusiastic tech gurus and small-time investors are quiet, and for an understandable reason.
What is happening now is that there are more investors but less buzz. So how did the rate for Bitcoin double in just five years? Well, there are two factors.
First, massive corporates, including MicroStrategy and MassMutual, have gone big on Bitcoin. Although many more people invested in Bitcoin, they didn’t make a big deal out of it despite the impressive exchange rate.
From 2019 to 2020, crypto-focused hedge funds doubled their assets under management from $1 billion to $2 billion, according to PwC, an accounting company, and Elwood, a financial firm. Corporations and financiers are now embracing the cryptocurrency that started its existence as an anti-establishment tool to avoid government detection.
This shift came after companies like PayPal and Robinhood made it easier to buy Bitcoin. In July 2020, the Office of the Comptroller of the Currency or OCC announced that all chartered banks could give custody services, which means they can keep their client’s bitcoins safe in their storage devices.
The second is the pandemic. Bitcoin has been advertised as a haven asset, one that is not issued by a central bank and sheltered from the outside world’s macroeconomic vagaries. The year 2020 have convinced other people to give it a try.
The pandemic has squeezed the government’s budget, making some people invest more in Bitcoin than traditional money. The economy looked unstable due to the pandemic and the added stimulus packages; people looked for a more alternative way to diversify their investment.
On the flip side, all the media hype around Bitcoin as well as other digital currencies has attracted the attention of various scammers which are launching get-rich-schemes by the dozens. In fact, it has become so bad the the FCA has recently placed a blanket ban on all CFDs (contracts for difference) which are traded in conjunction with cryptocurrencies. This fact has not deterred crafty marketers from finding ways to circumvent the new regulations, and are now resorting to other types of schemes such as “Immediate Edge” which has come to our attention. Interestingly enough, with the exception of one review website named scamcryptorobots.com, this latest ruse has received favorable reviews. As we dug in further we noticed most of the websites which have endorsed this software belong to the same affiliate network, and the rest of the articles are sponsored or paid promotional content which is not even worth reading since it is biased.
To sum up, while it is true that Bitcoin has created many opportunities for a lot of people it has also managed to gain itself a very fishy reputation. Proper research and consultation is always recommended before investing.