The journey of Bitcoin so far has been nothing short of spectacular. Its extraordinary growth in such a short period of time has made it a hot topic these days with more and more people being interested in the digital currency market because of it.
Being valued at $800 at the start of the year, Bitcoin has come a long way. It was valued at an impressive $3500 in Fall and Bitcoin hasn’t stopped growing. Prices are constantly going up and Bitcoin has now reached a new milestone today as it hit the $15,000 mark.
Although Bitcoin’s value is constantly rising, Pankaj Jain, a New York-based Bitcoin investor has advised small investors to keep avoid investing too much into Bitcoin. That’s good advice because Bitcoin isn’t useful for buying things because of its slow transaction times and because of the massive uncertainty in its value.
Bitcoin’s price is always fluctuating, it is highly volatile. Currently, according to CoinDesk, it’s back down to $14,800 and on November 29th, its value fell from $11000 to around $9000 in just half an hour.
Many believe that this is a bubble which will soon burst. Although so far Bitcoin has only shown an upward trend, it is true that there will come a point when the price either stabilizes or the bubble bursts and Bitcoin’s value drops massively which is why many traders have started placing bets that Bitcoin’s value will decrease in the future.
There are other problems that come with the growth of Bitcoin, energy cost is one of the biggest ones as far as Bitcoin’s concerned. As Bitcoins are traded online and with it growing daily, more and more people are investing in Bitcoins. A large network is needed to make sure everything goes smoothly.
However, sustaining such a large network comes at a huge energy cost too. It’s been estimated that the Bitcoin network currently consumes as much electricity as the whole of Denmark and Bitcoin will continue to grow as the current trend shows. Soon it’ll become unsustainable because of how unpredictable it is, there’s no stability in its value.
People have tried to make sense of the phenomenon that is Bitcoin and has tried to explain how this large expansion of the currency came about in just one year.
One explanation as given by an analyst quoted by the Financial Times, was that Bitcoin is like a video game, it’s limitless, boundary-less. Like in video games, the objective is to achieve the maximum possible score, imagine people investing in Bitcoins as the players. The score, in this case, would be the value, people thus compete and try to get the highest score possible.
There are interesting theories regarding Bitcoins, but one thing is certain whether it’s a bubble or not: Bitcoin’s value will rise in the foreseeable future. There’s speculation that Bitcoin will reach an absurd value soon. Billionaire Mike Novogratz recently told the media in an interview that Bitcoin can ‘easily’ reach $40,000 by 2018.
No one can say for sure what will happen to Bitcoin’s value as it is so unpredictable and volatile. During the start of this year, the idea of Bitcoin reaching the $15,000 mark was absurd but now it’s a reality. Anything can happen in this crazy age of digital currency.