Despite volatility and fluctuation, the overall trend of Bitcoin’s price has tread upward due to improved capitalization, robust monetary policy and growth in awareness of the cryptocurrency.
Bitcoin was created in 2009 to be a payment network. Before Bitcoin existed a number of other payment networks existed such as PayPal and Visa. However, Bitcoin arrived with its own disruptive element giving rise to a significant chain reaction within the world’s financial system.
How is Bitcoin different?
The uniqueness of Bitcoin and other cryptocurrencies lies in the existence of tokens which have a price that is floated against other currencies. This implies that based on various factors, a given amount of Bitcoins will either increase or decrease in value relative to other currencies.
In terms of price variation, Bitcoin has had its own fair share of ups and downs. Volatility has become a common word within its ecosystem. Events of early 2017 prove that the cryptocurrency can achieve significant changes in price over a short period of time.
Influx of investors
Bitcoin is still in its developmental stage and stability within the ecosystem is expected to keep improving. In recent years, price volatility has become an obvious characteristic of the cryptocurrency.
However, despite the intermittent ups and downs, Bitcoin’s price has retained a predominantly upward trend. Simon Dixon, CEO BnkToTheFuture.com, says:
“While volatility continues, the fundamental use case of Bitcoin as a store of value continues to drive new investors jumping in on every dip. Bitcoins properties as a global store of value are stronger than the warnings of central banks like PBOC as investors seek new homes for their capital.”
Other factors
The prevailing upward trend in the price of Bitcoin is not unrelated to certain fundamental factors that predict an even brighter future for the cryptocurrency.
Kumar Gaurav, Founder & CEO of Cashaa (Auxesis group), tells Cointelegraph that the solid monetary policies and technology behind Bitcoin are growing day by day. Gaurav notes that the mere fact that after having multiple attacks every day, the Bitcoin Blockchain is standing firm is reason enough to issue a vote of confidence on the cryptocurrency.
Another reason identified by Gaurav is the growth in awareness based on two facts. The first is that people are now getting to really know how Bitcoin works and they can separate facts from negative publicity which surrounded Bitcoin for a long time. The second is the disadvantage of having centralized systems which have burst out during the financial crisis shaking the belief of many people in the financial institutions.
“The biggest thing is that this is happening continuously and creating an atmosphere of distrust in the existing system,” concludes Gaurav.