Bitcoin Investors Enjoy Historic Run, But Is Now The Time To Buy In?
Most people around the world will have probably heard of cryptocurrencies by now, and in particular the most popular of them all, BitCoin (BTC). The problem is, not everyone knows what cryptocurrencies are. Simply put, they’re a form of digital currency. But unlike traditional currencies such as the UK’s pound sterling or the dollar in the United States, they’re not regulated or seen as legal tender by many of the world’s governments.
There are a few different ways that you get crypto like BTC, the first being mining. This is where people use hardware to run mathematical equations, and the more of these equations they solve, the more cryptocurrency they receive. If you invest in better hardware, you’ll be able to solve more equations simultaneously and in a quicker time frame.
The next main way to get cryptocurrencies is to buy and sell them just like you would do with stocks and shares. The aim is to buy low and sell high, in order to make as much money off the fluctuating values. And no cryptocurrency has risen quite as high as BTC, which is why it is the most well known to those outside of the crypto world. But to better understand its popularity, it helps to know how it all started. So here’s a quick history lesson.
Where it all Began
Many believe that BTC was the first-ever cryptocurrency, and to an extent it was the first that was fully developed. But there were others that tried to get off the ground before it as early as 1998, it’s just that they didn’t quite succeed. It wasn’t actually until 2009 though when the software to mine BTC first became available to the public, to allow the average Joe to get a chance to own this cryptocurrency which was valued at the time at $0.0008.
The problem was, as it was one of the first, there was no way to assign a value to BTC, especially as many places didn’t trade in it like they do with traditional currencies. In fact, in 2010 when it was valued at $0.08 for one BTC, there was a story of one man who conducted one of the first transactions and ended up trading 10,000 BTC for two pizzas. That today would now be worth $660 million, so unless they were the best pizzas ever, he probably feels very silly having made that decision.
Another year later, in 2011, and more cryptocurrencies emerged. This began to create a real marketplace, and saw real values become attributed to the cryptocurrencies available. Over the next couple of years, BTC would take a meteoric rise in value, hitting the $1,000 valuation mark inh 2013. And it would continue to rise over the years, eventually averaging out around the $7,000-$9,000 valuation range.
The problem was, BTC was so volatile. It could hit a record high one day, and the following day it could crash and end up at a year low. And unlike traditional shares, the market was open 24 hours a day, 7 days a week, 365 days a year. So for many people, unless they never slept, they could well go to bed a millionaire, and wake up almost penniless.
2021 – A Rollercoaster Year
Despite the COVID-19 pandemic, 2021 saw a meteoric rise for BTC. It already got off to a great start, with 2020 ending at an all-time of around $28,000, but it continued to rise and in February 2021, it hit a then all-time high of $46,642.61. But it didn’t stop there, its value continued to increase and by the end of March 2021, it reached $58,734.48 following announcements from both the crypto-trading platform coinbase, and Tesla own Elon Musk.
Then, following the announcement that Tesla had bought $1.5 billion worth of Bitcoin, it peaked in April. Hitting as high as $63,000. And then like with any share that gets to a peak, people started to sell and its value dipped, slowly dropping to $53,260.30. Then came May, where it demonstrated its volatility, plummeting to the $35,000 mark.
In June of 2021, the ship seemed to steady itself, as rather than dropping further, it remained around that same valuation, often rising and falling by the day, but always coming back to around that same price point. Then it dropped further in July, back toward the year’s start value of around $29,000.
But in recent weeks, the value has begun to increase once more. Slowly but surely, the value of BTC was increasing on average by 4.5% per day. And once again, we had a new record high this month, $66,008.47. BTC had not only caught back up to its previous high point, it overtook it. And it will likely continue to rise in the future, and it won’t be surprising if one day soon, we see it hit the $100,000 mark.
But as of right now, the price has fallen again, not as extreme as it did over the summer, it’s still comfortably sitting above $60,000. But it just goes to show the volatility again. Twice this year already, if you bought BTC at its lowest points early in 2021 and midway through the year, people who timed it right, will have doubled their money. How often can you do that? Where else could you invest your money to see those kinds of returns? Certainly not in savings, and definitely not investing in traditional currency.
How the future of BTC looks is uncertain. But what you can guarantee is the rollercoaster ride that it has been on so far hasn’t ended yet.