The notable mainstream focus has shifted to Bitcoin in the midst of a meteor rally as the asset recently reached over $ 52,500 per coin. Bitcoin (BTC) has generated a growing wave of interest from the major companies and has received a unique hedge status compared to other asset classes. But what makes Bitcoin valuable?
Perhaps one of the simplest answers regarding Bitcoin’s value is that it “is worth what someone will pay for it,” as billionaire Mark Cuban said in 2019. However, a number of other components play a role in the equation, making BTC unique from a competitor’s point of view. . While Bitcoin is still young compared to assets like gold and stocks, it should continue to prove its value and gain a foothold. Error in assets is still possible and is subject to fluctuations.
Bitcoin’s history and primary use
The creator under the pseudonym Satoshi Nakamoto published the written basis of Bitcoin in 2008. Then the asset went into circulation in early 2009 without any specific value. Over the years, BTC has been centered around online communities and the like, and over time has gained value as an online payment method that does not require sensitive user information. Regardless of the historical rise in price, Bitcoin is now often seen as a store of value and has a number of valuable features.
People can buy bitcoins from a cryptocurrency exchange and send them to a wallet that they control personally, on a device or online. One of the advantages of Bitcoin is that users can quickly and quickly send an asset to almost anywhere in the world without disclosing personal information, and also independently verify their assets.
Buy a major player
Over the past year or so, several large, major companies have significantly increased access to BTC. Tesla, one of the 10 largest companies by market value according to AssetDash, bought $ 1.5 billion in Bitcoin, which was announced on February 8, 2021. In addition to other companies, Square also announced a transfer of $ 50 million from Bitcoin in October 2020.
Business Intelligence Clothing MicroStrategy has bought over $ 1 billion in coins led by CEO Michael Saylor. Previously a skeptic, Sailor is now one of the most outspoken advocates of assets. He also personally owns more than 17,000 Bitcoins, according to the October 2020 tweet.
Recent Bitcoin purchases appear to have resurfaced amid economic turmoil after the COVID-19 coronavirus drew public attention in early 2020. US authorities increased cash counters’ activity in the months following the pandemic through quantitative easing, leaving the future value of the dollar in the country. without change . Secret.
The rationale for Bitcoin’s value
As an unlimited decentralized asset managed by a network of computers around the world (called miners), Bitcoin and its price are not technically tied to any government, market, or currency. Sometimes the price coincides with the prices in other markets, and sometimes the value of the asset moves according to its own pulley. Some crypto industry leaders such as Anthony Pomplano, co-founder of Morgan Creek Digital, see BTC as an unrelated asset.
Fidelity Digital Assets released a Bitcoin report in October 2020, which found “virtually no correlation between Bitcoin and the returns on other assets” between early 2015 and September 2020.
Since MicroStrategy’s Sailor, who ranked fourth on Cointelegraph’s 2021 Best Blockchains list, has conducted numerous interviews explaining the valuable aspects of Bitcoin since entering the BTC arena. A sailor told Cointelegraph in February 2021:
“I think there is a lot to be said about Bitcoin being a masterpiece of monetary engineering.”
“This is the first successful money network in world history,” Sailor said, referring to aspects of science and technology, as well as research from MIT.
Sailor told HyperChange in December 2020: “Bitcoin is being replaced this year by the old insider narrative, which is an unrelated speculative asset that retailers are trading in overseas exchanges with impact, which is cool.” Long-term investments in the world are safe assets.
Sailor went on to mention Bitcoin’s long-term potential as a way to take wealth out of government control, as well as a different mindset accompanying this use case that encourages participants to hold BTC for longer periods of trading short-term gains.