Bitcoin has been a good investment since its inception. It was developed by an anonymous developer or group of developers using the name Satoshi Nakamoto and introduced to the market in 2009. This virtual currency is created to act as money and a form of payment. Bitcoin eliminates the need for trusted third-party involvement. This made the path to the emergence of other cryptocurrencies.
In July 2010, Bitcoin’s price rose dramatically, reaching $0.09. In November 2021, it reached an all-time high of $68,000.
Do you know how bitcoin is created? Just a brief lecture on How is Bitcoin Created.
Bitcoins are created through a process called mining. These are the major components of blockchain technology that keep the system working. The role of the Bitcoin miners is to approve transactions and prevent fraud. Miners are rewarded with bitcoins upon approving blocks and adding data to the blockchain.
Miners don’t have to solve complex mathematical problems, they just have to discover unique 64-digit numbers to process. This unique number is termed ‘hash’. After discovering hash, miners will be rewarded with bitcoins. Only 1 in 17.5 trillion is guessing the correct hash.
| 24 hour high | 101,375.62 USD -1.87% |
| 24 hour low | 98,667.99 USD 0.89% |
| Market cap | 1.97T USD |
| Fully diluted valuation | 2.097T USD |
| 24-hour trading volume | 112,806.03 USD |
| Circulating supply | 19.79M |
| Total supply | 19.79M |
| Max supply | 21.00M |
Is Bitcoin a good investment?
On a basic comparison, we can say that bitcoins are more volatile than any other investment option. At the end of 2021, bitcoin experienced a significant resurgence after racing to its all-time high.
One of the difficulties it is facing is scaling a public blockchain. Another limitation is that, as mining becomes more difficult and the network becomes more intricate, the amount of computing power required is increased. This power in return, increases the cost of building the appropriate hardware. As a result, mining will be confined to the larger players, limiting the decentralized nature, and original premise of blockchain technology.
Reason for the downfall of Bitcoin
There are several factors for the downfall of Bitcoin. Let’s see what those are.
2022 was like a roller coaster with high levels of inflation that resulted in the implementation of a series of aggressive rate hikes.
As the interest rates are higher, investors sell their assets.
Due to the collapse of crypto exchange FTX, resulting in a loss of over $1 billion in consumer funds. This has affected investor confidence in crypto assets.
What factors could cause bitcoin to go up?
1. Lower interest rates
If the interest rate is low, investors tend to invest money into assets that carry a higher level of risk.
2. Expected approval of first-spot Bitcoin ETF
Bitcoin will upsurge upon the approval of the first spot Bitcoin ETF. This approval is anticipated to capture retail and institutional investors in cryptocurrency. This is a major step in the acceptance of digital assets.
3. Reduced recession threat
Once the economic downturn starts to diminish, alluring high-risk assets might experience a positive upward trend.
4. Changes in federal regulations
The bitcoin price is influenced by any actions made by the federal government associated with crypto regulation.
5. Wilder’s acceptance of crypto
As long as individuals use cryptocurrency to store and transfer wealth, the bitcoin value continues to show a vertical trend.
Predicting the Bitcoin future is not an easy task. Bitcoin goes back up by easing macroeconomic conditions and recent troubles in centralized banking. Bitcoin value continues to experience an upward trend as long as the inflation rate and interest rate go down.
Final verdict
It is not easy to answer ‘Will Bitcoin go back up?’ in one word. There are so many factors that contribute to the price trend of bitcoin. It is notable that Bitcoin is worth it as an investment, however, the associated risks can’t be neglected. Utmost understanding and knowledge are needed before taking a step towards Bitcoin. As of now, the signs point towards an upward trajectory, anyhow, only time could say ‘Will Bitcoin Go Back Up?’.
FAQs
A. The value of Bitcoin is determined by several factors such as high inflation levels, the collapse of the FTX crypto exchange, and aggressive rate hikes by the Federal Reserve.
A. Yes, you can earn passive incomes with Bitcoin including crypto staking, crypto royalties, and crypto lending.
A. Like any other cryptocurrencies, Bitcoin also involves several risks due to its extreme volatility. So, think before investing.