The number of regular retail investors putting their money into crypto is exploding on the back of top investors claiming the price for a single bitcoin could hit $5 million. Analysts suspect that we may be witnessing a change of the guard – a move away from government fiat and towards a new, rational, and finite system.
Part of the craze for buying cryptocurrencies comes from some of the crazy predictions that they could soon rise to millions of dollars apiece. A lot of investors don’t understand the mechanics behind what’s happening. Instead, they’re jumping on the train, making digital currencies a self-fulfilling prophecy.
It’s also become much easier for the average person to go out and buy bitcoin. Many of the traditional obstacles no longer exist. You can, for instance, buy ETH with NZD or BTC with USD on exchanges for virtually zero commission. It’s incredibly easy, all being driven by apps on smartphones.
Humanity is also waking up to the fact that government systems of currencies do not work. We’re heading to a future where central banks will no longer be able to manipulate the money supply because it’s fixed. When a person holds cryptocurrency, nobody else can add to the pile and counterfeit value for themselves. They can only mine currencies using computers, with the cost being high levels of energy usage.
Individual stories of success have been quite remarkable. For instance, years ago, enthusiasts would put away small amounts of cash, hoping that their investments would pay off. It was only a few pounds here or there. But because the price of the currencies has risen so substantially, many have been able to cash in their gains and retire. And the situation continues to improve. We’re by no means at the end of the crypto trajectory. If it becomes common currency, then the actual price of a bitcoin could reach millions of dollars. That’s because there are so many goods in the world, and so few crypto coins chasing them.
Data suggest that a large number of Britons already own bitcoin in one form or another – up to 20 percent account to some estimates. Many believe that as the network grows, so too will their portfolios.
What’s interesting is how bitcoin tends to jerk around in fits and starts. Over the course of its history, its price has rocketed, plummeted, rocketed to new heights, and plummeted again. It seems completely unpredictable.
According to finance experts, this sort of behavior is common for emerging assets. At first, nobody knows whether there’s a genuine market for them. Then over time, they become more popular. Then when they hit a ceiling – the extent of the network itself – the bubble grows and buying becomes more speculative. Eventually, you run out of buyers, and those in the market panic and sell.
However, throughout it all, the network of companies and consumers that accept crypto is growing all the time. And that’s what ultimate drives the long-term price higher. Expect millions more people to buy these currencies and become personally invested long-term.
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