In All, Remember Why Bitcoin Is Gaining Long-Term Value
Despite the differences, and arguments, as well as the dips and highs, the price of one Bitcoin has not remain the same since last year. It has more than doubled and keeps rising, albeit slowly, as it corrects. As a result, more people in several sectors have been monitoring progress in the Bitcoin market looking out for it to get even better.
A key issue of consideration is the level of interest shown by giant Asian companies like Alibaba. Also, the Chinese, Indian and Japanese governments have not only indicated interest in the Blockchain technology but in how Bitcoin is being used either as a medium of exchange, store of value or a method of payment.
As it is across the world, Bitcoin has a potential to get bigger in Asia. However, a typical Bitcoin enthusiast needs to always remember some of the trivial factors that keep increasing the long-term value of Bitcoin. This will – when spiced with further individual research – help to make informed decisions on how to invest in the digital currency.
Factors to consider
Firstly, you need to understand that the technology is now of age, having gained wider use with interests shown from various parts of the world. Though the level of trust in its use is still low, its adoption is no longer as low as it used to be. Even non-techie people in countries where technology isn’t advanced now have access to it. Figures show that the total cryptocurrency market capitalisation has increased more than 3x since early 2016,
reaching nearly $25 billion in March 2017. A Coinbase/ARK Invest report indicates that 46% of Coinbase users use bitcoin as a ‘transactional medium’ (defined as making at least one payment per year).
The price has been rising which is an incentive for those who have coins stashed somewhere and those still seeking to invest in it. It’s been noted that new users tend to flock to Bitcoin every time there is a spike in its price. Hence, the number of Bitcoin users has gradually grown and it keeps growing – between 5.8 million and 11.5 million wallets estimated to be currently active.
The use of Bitcoin for remittance, in particular, has grown in developing countries which suggest a whole new market on its own. This has been enhanced by the growing number of Internet and smartphone users. This is key as the number of people using Bitcoin to transfer money is getting bigger especially in Asia-Pacific and Latin America where payment companies focus primarily on local users.
With time, the limited supply of coins – and the lost coins – will catch up with higher demand and Bitcoin’s scarcity will become very obvious. There is also the halving of the block reward every four years which reduces the number of Bitcoin mined per block. The scarcity alone would draw more users to it, and there would be more ways to use it.
Though there are still some constraints in the market, the stage for doubts is over. There are more user-friendly wallets, Bitcoin/VISA debit cards Bitcoin ATMs. This situation will remain the same as more people seek alternatives to the major function that conventional banking system offers them.
Olusegun Ogundeji writes on tech-related issues including from the crypto/Blockchain space.
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