Is Bitcoin the Currency to Rule Them All?
Bitcoin is the most dominant cryptocurrency in the space and thanks to the recent banking sector collapse, it may finally be set for a solid bull run. In case you’ve been living under a rock, Bitcoin is a decentralized virtual currency that can act as a form of payment without needing intermediaries like banks or governments. You can get Bitcoin by mining and verifying transactions on the blockchain network, or by purchasing it on various crypto exchanges like Gate.io. Since its inception, BTC has gained widespread acceptance and adoption, becoming the most popular crypto in the world. Due to its limited supply and decentralized nature, Bitcoin has emerged as a popular investment asset disrupting traditional financial systems.
In this article, we will explore the importance of cryptocurrency in 2023 and how the conventional economy is failing investors. Join us as we delve into Bitcoin's price fluctuations and give you a glimpse into the future of this revolutionary currency!
Why is Crypto Important?
In a 2008 white paper titled 'Bitcoin: A Peer-to-Peer Electronic Cash System', Satoshi Nakamoto laid out his vision to make crypto an alternative payment system resistant to inflation and central authorities. And today, that vision has mostly been achieved due to crypto's decentralized nature, which makes them resistant to government censorship, fraud, and corruption. In addition, the transparency and security of crypto transactions make them an attractive alternative to traditional banking systems.
Furthermore, cryptocurrencies are accessible to anyone across the globe with an internet connection. Many people don't have access to traditional financial services, such as those in developing countries or who do not have a bank account. Now, these people can also participate in the global economy, which is all made possible with crypto.
And Bitcoin is not the only cryptocurrency that has gained popularity. Ethereum was launched in 2015 and has since become the second-largest cryptocurrency in the market. It is mainly because Ethereum was launched as a decentralized platform for developers to build and deploy decentralized applications (dApps). Hence, decentralization is no longer limited to finance and can be applied to revolutionize all other industries.
Additionally, cryptocurrencies enable investors to diversify their portfolios and earn significant returns. The cryptocurrency market is volatile, and there are regular ups and downs compared to traditional markets. Hence, while riskier, you can make more profits in the crypto market in a shorter time. Moreover, cryptocurrencies have grown significantly in recent years, making them a lucrative investment option for many investors.
Cyclical Failures of Conventional Economy
Recurring patterns of booms and busts have plagued traditional financial systems for centuries. One of the major factors contributing to these cyclical failures is the reliance on central banks to manage monetary policy. It leads to manipulating interest rates and printing money, which ultimately results in inflation. As a result, we see widespread unemployment, economic instability, and financial crises.
In addition, the conventional economy is based on a system of debt, where individuals and businesses borrow money to invest and grow. This can cause the economy to become over-leveraged, leading to the collapse of asset prices and widespread defaults.
Being decentralized, cryptocurrencies like Bitcoin offer us an alternative to the conventional economy which is not subject to any central authority. Bitcoin also operates on a system of limited supply, meaning that inflation will never be a problem. Moreover, crypto allows peer-to-peer lending without intermediaries, offering an alternative means of financing for individuals and businesses. So, while cryptocurrency adoption is still in its early stages, it has the potential to disrupt the cyclical failures of the conventional economy and offers new opportunities for economic growth and stability.
BTC Price in 2022, 2023 and Beyond
Cryptocurrencies skyrocketed in 2021 thanks to the widespread adoption of blockchain technology across various industries. However, 2022 has been a very rough year for all cryptocurrencies, including Bitcoin. In fact, the largest cryptocurrency lost nearly 65% of its market value in 2022. Just one year after reaching its all-time high of $69,000 in November 2021, the price of BTC fell to $16,600 in November 2022. A series of unfortunate events, including the Terra Luna crash, the collapse of the second-largest crypto exchange FTX, and the looming macroeconomic conditions caused this.
However, in 2023, Bitcoin witnessed a sharp rebound after the nerve-wracking previous sessions. As of March 17, Bitcoin price is in the positive range of $26,000 levels, after plunging under $20,000 last week. The plunge was mainly due to the shuttering of Silicon Valley Bank and Signature Bank, which sent the U.S. banking system into a frenzy. However, as the U.S. authorities assured depositors full access to their funds, investors started looking for a safe haven for their wealth. And Bitcoin came out on top, boosting its prices instantly by 15%.
Currently, the price of BTC is following a perfect stock-to-flow (S2F) trajectory, and experts believe it is on track to reach $100,000 in the coming years. This model considers the current supply of BTC and the rate at which new BTC is being mined. Bitcoin has a maximum supply of 21 million, and the rate of difficulty of mining is continuously increasing. Therefore, from the current supply ratio to the annual production rate, BTC will likely reach the predicted $100,000 rate soon.