Why Bitcoin Price Passing the $4,000 Milestone Matters
Bitcoin started 2017 at $963, which makes its recent crossing of $4,000 a blistering 300% rise so far for the year. This rapid ascent is more than just a passing phase, and it is important for investors to understand exactly what is driving this rapid increase in Bitcoin’s price.
Crytpocurrencies Go Mainstream
Bitcoin is no longer the only cryptocurrency out there. The underlying block-chain technology that drives Bitcoin’s success has been used in a a number of alternate cryptocurrencies that share some features with Bitcoin yet are also different in key ways.
The cryptocurrency market is now worth a staggering $136 billion, most of which is made up of the top ten most popular cryptocurrencies.
This transition of cryptocurrency from a novelty or of interest only for tech wizards to a popular store of value and method of transaction for the mainstream of investors and corporations has helped drive the interest in Bitcoin as the original cryptocurrency to an all-time high.
An Alternate Store of Value
While Bitcoin was originally touted for its ability to act as a transparent and universal means of transaction, it is its ability to store value that has been its main attraction for investors. In times of geopolitical tension, investors have traditionally looked to the Japanese Yen, the Swiss Franc and gold as a safe store of value, but Bitcoin is now making a name for itself among these safe haven assets.
The particular attraction of Bitcoin as a store of value is its decentralized nature. The Yen and the Franc are still vulnerable to geopolitical events that affect those countries, while gold is still ultimately tied to a physical good that must be safely stored somewhere.
Bitcoin, on the other hand, exists only on the Internet, so as long as there are computers connected to the Internet, Bitcoin is likely to retain its value in even the most terrible natural or man-made calamities.
Surviving the Fork
Bitcoin’s future was uncertain until very recently due to key decisions in the management and future development of Bitcoin. Sparing the boring technical details, Bitcoin’s interested parties had split into two camps, and it was essential that these camps agree on a way forward so that the efforts that drive Bitcoin’s operation were working together under the same rules.
This ‘fork’ in the Bitcoin community created a lot of uncertainty about its future path, which weighed down on Bitcoin’s price. With the passing of this potential fork, the future for Bitcoin looks bright, and the price of Bitcoin has soared ahead with no other potential development speed-bumps on the horizon.
Bitcoin Price and the Future of Investing
Bitcoin passing the $4,000 milestone signals that it is now a serious element of the world of investing. Even major institutional investors are starting to add small stakes in Bitcoin and other cryptocurrencies to their portfolios.
As investors it is time to learn about Bitcoin, alternate cryptocurrencies and block-chain technology because these are all now critical and growing elements of the investing world.