Bitcoin has long been a popular market for those looking to gain some kind of exposure to the financial markets. Many beginners have taken the approach of ‘just buying a bit of bitcoin,’ and they have made considerable returns.
With Bitcoin printing all-time highs, the first question is, will this continue? The second question is, why? Looking behind the scenes, it is clear that a seismic shift could be on the cards.
Long-term price strength can’t be guaranteed but comments from the financial establishment shed some light on the reasons for the crypto’s recent strength.
Will the Financial Establishment accept Bitcoin?
There are two ways that Bitcoin’s acceptance will be measured:
- As a store of wealth
- As a payment processing tool
This differentiation is important as the payments side of Bitcoin’s worth has been the focus of analysis for a long time. It still faces many challenges.
Bitcoin as a means of transaction
In January 2021, buybitcoinworldwide.com reported that payments still take a minimum of 10 minutes and a maximum of one day to process.
Elon Musk’s celebratory message of last week that Tesla would accept Bitcoin as a payment tool for its products was noteworthy. Buying a car, however, is a drawn-out process and a day’s wait is not unusual.
Musk’s words may have been interpreted as suggesting we’ll all be using Bitcoin anytime soon. The technical protocols currently just don’t support that scenario.
Bitcoin as a store of wealth
Bitcoin bulls are on much firmer ground when they argue that Bitcoin could be a store of wealth. Blockchain technology ensures transparency of holdings, and each day, week, or month that Bitcoin rises in price, the resistance to its acceptance becomes weaker.
There is no guarantee that the coin will hold its value, but mainstream financial houses’ reaction to the situation is interesting.
Wall Street, then
One year ago, Warren Buffet was speaking for many in the establishment when he said:
“Cryptocurrencies basically have no value and they don’t produce anything. They don’t reproduce, they can’t mail you a check, they can’t do anything, and what you hope is that somebody else comes along and pays you more money for them later on, but then that person’s got the problem. In terms of value: zero.” (February 2020)
Wall Street, now
Fast forward 12 months and JPMorgan bosses dominate the headlines by sharing that pressure is building on the bank to embrace bitcoin. A lot of the pressure is coming from the bank’s staff. Troy Rohrbaugh, global markets head, explained that during a recent internal ‘town hall’ meeting, it was the bank’s employees who suggested greater involvement in the crypto markets was required.
Follow the money
Bitcoin is limited in supply to a far greater extent than fiat cash, which is being pumped into the markets by central banks. The coin, therefore, offers a hedge against inflation, which is considerable progress for a project which started as a technical experiment designed to revolutionise the financial markets
Ironically, Bitcoin is increasingly used as a store of wealth by the financial establishment it was designed to challenge.
If you want to know more about this topic or have been scammed by a fraudulent broker, please contact us at [email protected]
- Cybercrime still on the rise – be wary of potential scams
- How to Learn to Trade Unpredictable Summer Markets
- “The Dollar’s Out of Bed and it’s All Turning Red”
- Dating App Tinder – The New Scam in Town
- Scammer Alert – Trader Feedback Suggests 500investments is a Scam Broker
- What’s Going on at Binance and How Do You Find a Safe Broker to Trade Crypto?
Cybercrime still on the rise – be wary of potential scams
Safest Forest Brokers 2020
|Broker||Info||Best In||Customer Satisfaction Score|
|#1||Your capital is at risk Founded: 2011||Global CFD & FX Broker||
BEST FOREX BROKER Visit broker
|#2||Your capital is at risk Founded: 2015||Global Forex & CFD Broker||
LOWEST FEES Visit broker
|#3||Your capital is at risk Founded: 2014||Global Forex & CFD Broker||
Best Trading Conditions Visit broker
|#4||Your capital is at risk Founded: 2014||Global Forex Broker||
BEST SPREADS Visit broker
|#5||CFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Founded: 2010||Global Forex Broker||
Low minimum deposit Visit broker
Stay up to date with the latest Forex scam alerts
Sign up to receive our up-to-date broker reviews, new fraud warnings and special offers direct to your inbox