Bitcoin Breaking Records With Its Growing Value

Since 2008, when the first-ever cryptocurrency – Bitcoin, was invented by an anonymous person called Satoshi Nakamoto, many people have been skeptical about whether we’ll see any impact on the financial industry. Interestingly enough, a couple of cryptocurrencies like Bitcoin and Ethereum have slowly grown in value over the years. People who invested in these digital currencies a couple of years back have gotten insane returns on investment, with some earning more than 10,000 times what they originally put in. 

However, it has been this week that Bitcoin reached its highest price ever. As we’re publishing this article, the value of Bitcoin is around $40,000 – which is the highest it has ever reached in its history. In fact, Bitcoin has doubled its value in less than one month.

Unlike fiat currencies regulated by governments, the value of bitcoin and other digital currencies is determined by the market forces of demand and supply. When more people want to buy it, the values go up, and when more are selling, the value drops. The speculations around the Bitcoin’s potential have played a significant role in influencing people’s decision to buy or sell. 

Another reason why bitcoin has rapidly increased in value is that several institutional buyers have joined the bandwagon. Several prominent asset managers like Tudor Investment and Guggenheim Partners have announced making some form of investment in Bitcoin. Many financial analysts, such as JPMorgan, have also predicted the coin to go past $140,000, which has made investments in Bitcoin explode even more. 

The decline of the US dollar on the foreign exchange market could also be one reason bitcoin has seen many people investing their money in it. The value of the US dollar has dropped by over 6.8% on the international exchange market compared to other strong currencies like the Euro and Japanese Yen. 

There is no tested formula that you can use to reliably predict the value of Bitcoin in the coming few months. Therefore, the answer to if you should invest or not should largely depend on whether you are ready to take the gamble. If it works out, you will earn big, but if it doesn’t, you will lose big as well. However, if we consider the coin’s brief history, there is no year since 2013 when its prices have not fallen at least 25% from a high point.