Critical reasons for the growing Bitcoin's popularity
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Most people know Bitcoin is a volatile digital currency. After suffering a severe crash back in 2018, this cryptocurrency has bounced back. It has surged around 800% since March last year. But, what's the reason for the sharp rise of Bitcoin?
Bitcoin's value has been increasing every day. And this explains why many investors are looking for ways to invest in it. Today, people are purchasing Bitcoin using fiat money on platforms like bitcoin revolution. Some investors argue that this cryptocurrency will eventually be a mainstream asset. Some experts believe that Bitcoin's price will keep rising over the years.
However, this popularity has triggered a debate between Bitcoin bears and bulls. According to Bitcoin bulls, this cryptocurrency will eventually be an acceptable asset. On the other hand, bears remind the world about the volatility of this digital currency.
Most people know about Bitcoin's volatility, and recently, this cryptocurrency bounced back after suffering a severe crash back in 2018. What's more, its popularity has increased over the years. Here are the critical reasons for the rising Bitcoin's popularity.
The Covid-19 pandemic led to the rising popularity of Bitcoin for various reasons. According to the IMF, 2020 was the "Great Lockdown" year. And this is the year when the popularity of this virtual currency grew.
This pandemic affected most economies around the world. It caused a rampage that forced the world to impose lockdowns. The effects of the factors that followed were devastating on the global economy. Most mainstream assets and investments suffered a big blow.
Investors had growing fears about traditional assets. This created an ideal environment for the revival of Bitcoin. Some experts had written off this cryptocurrency, however, it took a U-turn with many investors and large companies stockpiling the currency.
The increasing global investments that embrace digital currencies are emerging. That means Bitcoin will most likely continue to gain growing popularity.
Some investors are rushing to buy Bitcoin because they need an alternative investment for securing their money. To some people, Bitcoin is a haven because it's like gold. For this reason, some investors bought Bitcoin during the pandemic because it's less conventional.
While some investors bought Bitcoin as value storage, others purchased it to sell later for profits. However, investors that purchased this virtual currency gained. Most early adopters received handsome rewards, with some earning four times their initial investment.
On realizing that Bitcoin compares to gold, especially during the global pandemic, more investors consider Bitcoin an alternative asset. And more investors are opting for this digital coin rather than gold. Nevertheless, this development will take time due to the large gold market capitalization.
Bitcoin's quantity is limited. And this is another factor that has led to the current cryptocurrency craze. Bitcoin's supply is limited to 21 million units. Around 18 million is already in circulation. The cryptocurrency's value continues to increase due to its limited supply.
What's more, the coronavirus pandemic didn't affect Bitcoin's value. On the other hand, traditional currencies' value fell because of increased money-minting. People know Bitcoin for wild fluctuations. However, its value increased steadily back in 2020, and its volatility dropped.
Bitcoin continues to gain popularity globally, with people purchasing and selling this virtual currency for profits. More businesses are accepting this digital currency as a payment method. What's more, the value of this cryptocurrency is gradually stabilizing. The ability of this virtual currency to maintain its weight during the global pandemic has prompted more people to invest in it. And this has increased its popularity in different parts of the world.