The price of Bitcoin keeps steadily rising despite occasional fluctuations. Several Wall Street and venture capital firms are betting big on the blockchain – Bitcoin technology. At any given time the value of Bitcoin depends largely on the strong market belief on the currency and fluctuations in Bitcoin related Ponzi schemes in particular the Chinese stock market. There are several factors which have a direct influence on the price of Bitcoin over the long term. This factors are what most investors observe before they invest in Bitcoin.
Here are some Reasons for investing in Bitcoin or increasing your current portfolio.
1. Fixed supply
January 2009 saw the value of Bitcoin rise from zero to over $600 right now. Most of the Bitcoins worth emanates from people envisioning the digital benefits of digital currency. It’s the best way for money to be transferred amongst two people anywhere across the globe in a cheap and secure manner. Any
cases of a buyer defrauding or counterfeiting the recipient are alleviated as there is no middleman.
In the long term, the value of this currency might eclipse over others. When over 21 million Bitcoins are released the supply of the coins will halt to cap supply. It’s estimated that this figure will be reached during the year 2140. After every four years, the number of Bitcoins released into the market is halved. This is a calculated strategy that ensures its buying power is preserved.
2. Growing Interest in Using Bitcoin
The volume of transaction can also drive up the price of Bitcoin. This incorporates both merchant adoptions and transactions. Ever since the first Bitcoin transaction back in 2010 when a certain restaurant in Florida offered 10,000 Bitcoins for anyone who ordered a pizza the currency seems to be
gaining momentum. There has even been launch of the Silk Road a certain black market operating online and deals with illegal substances such as illicit goods and drugs.
During February 2011 the price of Bitcoin its exchange price leveled with the US dollar. This development results in a massive influx of new Bitcoin spectators and active users. After the 2011 drop in value it began to rise again in 2012. With reputable websites such as Reddit and WordPress
recognizing the currency as a legitimate transaction medium its value rose further.
Bitcoin not only gives the user privacy but it also acts as a better alternative to conventional banking. Today, several people living in countries that have highly volatile currencies such as Argentina, Philippines, Indonesia, India and Russia prefer Bitcoin. In these countries, the credit cards and banking infrastructure are underdeveloped so this online currency which can be simply used through a smartphone and transacted online is a blessing to many.