Even though 2018 has been challenging so far, Bitcoin remains the most traded currency on the crypto market. Most investors know that Bitcoin is a rollercoaster ride with many ups and downs. It has reached a value of $20,000 in December 2017 but has since dropped considerably. Still, compared to many of the altcoins out there, Bitcoin is doing much better enduring the current dip in the crypto market. Here’s why the popular digital currency has managed to weather the storm.
Bitcoin remains the number one choice for institutional investors. While amateur investors are willing to experiment with altcoins, a lot of those that have deep pockets are mainly buying Bitcoins. Meanwhile, the market right now is filled with failed and floundering cryptocurrencies. People who want to invest in cryptocurrencies but are worried about putting money in a token that could end up disappearing are more likely to choose the token that has the largest following – which is Bitcoin.
No other cryptocurrency has as much liquidity or a share of the market cap as high as Bitcoin. This alone makes Bitcoin a top choice for new investors. The risks of investing in cryptocurrency are well–known. It’s only logical that anyone who wants to play it safe is going to choose the one that has the most institutionalized presence in the market. The Bitcoin price has decreased by 70% this year, but many altcoins decreased upward of 90%. The numbers show that in a clearly volatile market, Bitcoin is still less volatile than most of its competitors. Stability is a huge selling point when price fluctuations happen so suddenly. No digital currency is truly stable, but Bitcoin is still more stable than most other options.
The low stability of many altcoins has helped Bitcoin tremendously. Many investors who bought altcoins switching back to Bitcoin as a precaution. If this wasn’t the case, the dip in Bitcoin would be even more pronounced.
Bitcoin has a total supply of 21 million. Once all the coins are mined, we will not be able to create new ones. The supply of Bitcoin is going to decrease, and when this happens, the price will go up. Bitcoin is scarce in comparison to fiat currency or even gold, which makes it more valuable.
Bitcoin draws its usefulness from its efficiency. People who prefer Bitcoin over fiat currency like the fact that a digital asset is decentralized. While regular currency is controlled by banks and governments, Bitcoin allows people to maintain more control. It also has the advantage of being divisible and versatile. You can buy coffee with it just as easily as you can buy a new car. The token is open-source, which means it is highly transparent and adaptable. With Bitcoin, you make transaction quickly and efficiently from anywhere on the planet.
The one drawback is that there are a lot of merchants who do not accept payments in Bitcoin. However, more of them are joining the trend, and Bitcoin is obviously more accepted than any other cryptocurrency. So if someone is looking to use a digital currency as cash, BTC is the obvious choice.
The value of a network lies in its size. With every new person joining it, the value and the utility go up. A single owner’s Bitcoin is useless as a currency if no one else uses it. No merchants are going to sell their products and no one is going to trade knowing that they won’t have any use of the tokens. The more people hold Bitcoin, the more vendors accept it for goods and services and the more valuable it becomes.
Bitcoin has a huge advantage of being the first cryptocurrency to grab the public’s attention. It has always had the largest network, and there is no indication that this fact is going to change anytime soon. This has helped with Bitcoin’s endurance. People want to invest in things that have value, and right now no other digital currency can make as good of a case as Bitcoin.
Some experts think Bitcoin will mirror the dot–com bubble of the early 2000s. They speak towards Bitcoin’s lack of value as the main reason for a bubble. But in fact, Bitcoin has more value than one might think. And it is not just because of the blockchain technology itself. No one knows what will happen on the cryptocurrency market; not even the best analysts can predict the future. But a strong case can be made that Bitcoin is here for long. Even after dropping in value by 70% over 6 months, Bitcoin remains the most widely used and adopted cryptocurrency in the world. Its stability, utility, network value, and limited supply are just a few of the factors that have helped Bitcoin maintain the number one spot on the list of the most popular digital currencies.
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