Bitcoin Value Reaches Three-Year High: What Does This Indicate?
Ever since its debut in the late 2000s, Bitcoin currency has increased steadily in value. It remains one of the most promising digital currencies on the market and could transform the marketplace in a variety of ways.
A recent piece of news revealed just how big this potential is when it was shown that Bitcoins passed the $800 mark for the first time in three years.
What Caused This Increase?
There are a variety of reasons that Bitcoin prices skyrocketed. First of all, trading is at an all-time high, particularly after the series of strange events that occurred in Europe and America.
The first was Brexit, in which the United Kingdom left the European Union. This economically-suicidal move drove the pound to historic lows and even impacted the Euro. This sent desperate European traders scrambling for a more stable and cost-efficient investment.
Second was the successful presidential election of Donald Trump. The value of the dollar after this shocking victory was rather wild, first dropping, then rising, and then dropping again. This has made the dollar seem like an uncertain proposition for many businesses.
With the value of the dollar in such a state of turmoil, digital currency like Bitcoins become an attractive option to traders because they don’t depreciate in value nearly as much as traditional national currencies. This steady balance has made Bitcoins a useful investment, causing a high increase in orders.
Another interesting influence was the falling value of Chinese currency. The yuan has been falling again rapidly after it was once the highest value currency on the market. This deprecation has sent the dollar and the pound into their own high increases, resulting in a strange economic situation that bodes well for those who are willing to invest in Bitcoins.
This rapidly increasing value is not just promising for Bitcoin traders, but for people all around the world. Digital currency like Bitcoins could truly transform the landscape if they were allowed to fully prosper. But just how useful are Bitcoins now and how can they continue to help balance the economic marketplace?
The Major Purpose Of Bitcoins
One of the biggest benefits of the Bitcoin is the way that it helps balance investors fear of inflation and uncertainty in various forms of currency. This is why trading in Bitcoins skyrockets during strange times: investors are looking to put their money into a currency that is stabler and more reliable than other currencies with more wiggle room.
However, this is a major benefit to those who don’t invest because it helps balance against potential inflation. As investors turn to Bitcoins instead of other currencies, the value of those currencies is likely to increase.
That’s because fewer people are investing in them and increasing their value every so slightly. As a result, high-value and important currencies, like the dollar and the Euro, can maintain a stabler balance than they would without Bitcoins.
This is one reason why few currencies have had a total collapse after the emergence of Bitcoins. Yes there have been currencies in less developed countries that have suffered, but Bitcoins serve as an important buffer between failure for many currencies. The increasing investment in these currencies is proof of that and it shows just how important Bitcoins could be for global economic security.
If the value of the Bitcoin continues to rise, is there any chance that nations could give up their currency and turn totally to Bitcoins? Probably not as the existence of these national currencies helps give Bitcoins their value.
However, in an increasingly internet-based world focused so heavily on online living, there is a chance that more people could turn to these coins in the future. This could have a major impact on the economy and force the hand of the world’s nations.