Since the time Bitcoin surfaced, there have been a lot of speculations about the same. It was 2009 when the world saw the rise of a new era of economic transformation. Cryptocurrencies became the other medium of money exchange. It’s only because of Bitcoin that new technology came into existence. Blockchain lies at the heart of Bitcoin and other cryptocurrencies came into existence.
Although Bitcoin was new and held a lot of prospects, it didn’t receive a positive review.
For a long time, the price of Bitcoin didn’t rise; it kept on plummeting as many thought that Bitcoin is like Tulip crisis. It will grow like a bubble and burst soon, thus restricting its price rise. Despite all this, Bitcoin’s positive features made it very popular and soon it became one of the highest valued cryptocurrencies. But, what is going to be its future. 2018 is about to end, will we see the same hike in its price or will the rate of Bitcoin fall. Let’s analyse.
What is Bitcoin?
Before heading further, let’s have a quick recap of what is Bitcoin and other facts about the same. Bitcoin is the first digital currency which has gained popularity over the years. Many people have made huge profits out of it. It is a peer-to-peer currency which doesn’t require a third party for confirming and validating the transactions. One can also exchange Bitcoin with fiat currency.
Few Facts about Bitcoin:
- Bitcoin first came into existence in 2009.
- Satoshi Nakamoto is the founder of Bitcoin
- Satoshi wanted to create a currency which doesn’t require a third party
- There are only 21 million bitcoins
- Blockchain forms the basis of Bitcoin transaction
This platform is powered by a network of computers which are known as nodes. The work of these nodes is to verify and validate the transactions.
The nodes which help to operate the Blockchain network are rewarded for their work. They need to solve a mathematical computation problem, the one who does it first gets the reward. This entire process is called as mining.
Bitcoin works on a decentralised platform. There is no central server governing the Bitcoin. Instead, they operate separately making the entire platform decentralised.
Price Fluctuation of Bitcoin
When Bitcoin first came into existence, it faced a lot of opposition. The concept first didn’t get acceptance, but in last one decade, it has gained popularity. Bitcoin has witnessed a massive price rise, especially in recent years. 2017 was a great year especially for the Bitcoin holders and investors. It is also called as the Bitcoin Rush. It reached its highest value in 2017, i.e. $19,498.63. All this made Bitcoin even more popular, and it also gained acceptance. But when it comes to the price of Bitcoin in the year 2018, then it started plummeting in the earlier months of 2018. The prime reason behind this was:
- India banned cryptocurrency making it illegal
- Facebook decided to ban cryptocurrency ads
- South Korea announced taxation on cryptocurrency.
Well, this certainly doesn’t mean that the price of Bitcoin will not rise and it lost its popularity. Among the many predictions about Bitcoin for the year 2018, John McAfee founder of McAfee securities predicted that the price of Bitcoin would rise to 10 times. Saxo Bank predicted that the price of Bitcoin would rise above $60,000 in 2018 before it crashed. These are just two examples of the many predictions about Bitcoin. The sole reason behind such fluctuation is that Bitcoin doesn’t offer trust to the investors.
Despite being a decade old, Bitcoin has still some unanswered questions like whether Bitcoin is going to continue its rise, whether it is going to crash, is it like Tulip Crisis, is Bitcoin like a bubble which is going to crash soon. These are just some of the reasons leading to fluctuating price of Bitcoin.
The price of Bitcoin is based on how valuable the market is, i.e. how many people are buying and selling Bitcoin. The price of Bitcoin depends on demand and supply. But still, the confusion surrounding Bitcoin makes its price fluctuate. Although Bitcoin offers series of benefits and opens new avenues of financial transactions but at the same time, it also has some drawbacks like it anonymity of the user, no governance and regulations which has led to its usage in illicit activities. Such disadvantages make it difficult for investors to invest in Bitcoin thus affecting its price.