Cryptocurrencies have been the subject of many of the news headlines in recent times. They’ve seen a massive surge in their values and investors have gone crazy investing into different cryptocurrencies. Bitcoin, the first cryptocurrency, has had the largest growth that any kind of asset has ever seen.
At the time of writing, the value of Bitcoin has reached $4,835.98 US Dollars per Bitcoin. Its value was at $704 US Dollars by the end of October last year. That should give you some retrospect on exactly how crazy the increase in value for Bitcoin has been.
Will it go to a Million or to Nothing?
The blockchain technology introduced through Bitcoin in 2009 is something that’s still fairly new. It has seen immense success so far with Bitcoin and other cryptocurrencies like Ethereum and Litecoin. Early investors into these blockchain networks have seen unprecedented returns on their investments. This has cited more and more investors to take part in the frenzy.
The question is: Will Bitcoin cross the million dollar mark or crash and burn?
That’s something on the mind of everyone that has a lot staked on Bitcoin. One reason why Bitcoin should cross the million dollar threshold has got something to do with a psychological factor involved with the transactions that have to be conducted with Bitcoin. When we make our day to day transactions, we trade in monetary values with the least amount of decimals involved. For instance, I’d walk into a coffee shop and pay $2 for it. The same amount of 2 dollars would be worth 0.00040964 Bitcoins. All the cryptocurrencies are infinitesimally divisible. The smallest tradable denomination of Bitcoin is 0.00000001 Bitcoin also called as the Satoshi (after the mysterious creator of Bitcoin).
For the smallest amount of tradable Bitcoin to be at a monetary value with which we can trade easily, the value of one Bitcoin would have to be worth $1,000,000 US Dollars so that the value of one Satoshi would be worth 0.01 Bitcoins. That is the kind of value which would make more sense in common usage.
Starting off the year at $999 USD, the Bitcoin is safely above the $5,000 USD mark right now. That’s a 500% increase in its value. Despite all hindrances and regulations Bitcoin has faced, it’s manage to reach this point and everything so far indicates that it will indeed go on to cross the million dollar milestone.
Bitcoin can be compared to Icarus. He was indeed successful in obtaining the ability to fly but he was hasty and flew too close to the sun. He burned up and crashed down to his death. That is a fear with Bitcoin. It’s risen very fast in a small amount of time. Its problems keep growing as the network itself is growing and unless the necessary changes are applied to resolve issues of scalability and power consumption faster than they are growing, it could indeed crash.
To be on the safe side, everyone who has all their eggs in one Bitcoin basket should set some aside in other forms of assets in case a crash comes along.