BTC Price Hike and Why You Should Care
Bitcoin (BTC), the most popular crypto currency, has, over the past couple of weeks, been on a tremendous bull run resulting in the price of a single coin reaching $36 thousand. This increase in price has been driven by many different factors, including the purchase of large amounts of bitcoin by investment firms and bankers as a hedge against inflation. Bitcoin seems to be growing into a modern gold equivalent and is proving more convenient than other currencies. BTC can be bought and sold in huge amounts almost instantaneously for only cents, something now possible with material goods. Several large asset management firms and corporations such as Square, Stone Ridge Holdings, and Microstrategy have purchased 50 million, 114 million, and 425 million in bitcoin respectively. Though a legitimate asset for several years now, BTC has been considered an online fad by corporations and older economists. These recent large purchases have given a certain amount of confidence and legitimacy to the cryptocurrency. The price of bitcoin will continue to rise in the coming years, driven by increasing interest in the utilization of bitcoin as an investment and as a general currency, ensured by a limited supply against inflation. Bitcoin’s peak is believed to be upwards of $100 thousand by several enthusiasts, and others believe that a single coin could reach close to $1 million. The rising cost of BTC is only encouraged as the US dollar continues to fall and governmental bond yields remain almost nonexistent. For example, in Zimbabwe, after huge hyperinflation due to presidential mismanagement, there was adoption of BTC as currency within the nation. Uranium, gold, silver, and other physical holdings have long been considered excellent hedges against inflation, especially in our time of limitless federal spending, but BTC is emerging in many portfolios due to its excellent performance and reliability. Bitcoin is also an excellent asset due to its freedom from reliance on governmental systems, and resistance to inflation. Furthermore its nature as a decentralized currency means that the public ledger of transactions is not under the control of a single administrator.
Fantastic – Bitcoin is an excellent asset with great performance, but why should the common citizen care? BTC allows individuals to maintain freedom from authoritarianism by trading with an asset holding real value, as opposed to only their local currency. It has further allowed individuals to escape exchange rates, the fluctuation of currency values, and regulations against the import or export of currency from their country. For example individuals in the US with family in Venezuela have been known to send Bitcoin to their relatives in order to escape the 56% wire transfer fee that can occur as USD is converted to bolivares. Further, any opportunity for individuals to reclaim control over the worth of their labour is important and valuable. Federal involvement in the daily lives of individuals has grown and the rights of the individuals have continually diminished with the passage of the Patriot Act. With the looming loss of inter-message encryption and the furtherance of the surveillance state, crypto currencies like Bitcoin allow individuals to retain a degree of freedom in their finances. Each reader should continue to learn of secure cryptocurrencies for the protection of their economics.
Cover Image: “Bitcoin Chart” by Fabian Figueredo is licensed under CC BY-SA 2.0
One Reply to “BTC Price Hike and Why You Should Care”
Amazing material, Thank you!