There’s no other way to put it: cryptocurrency is all the rage right now. And for a good reason, too. Today, the total market cap of cryptocurrencies hovers around USD 300 billion, with bitcoin comprising nearly half that number at $143 billion.
It hasn’t always been this way, though. Ten months ago, bitcoin struggled to find footing above USD 2,000, and today, it sits comfortably at over $8,250.
You may be wondering why this is the case. Where did they come from? And why are people seemingly so hyped about them?
If you’re curious about these questions, then join the crowd. Over the past few weeks, we’ve seen a flurry of news surrounding bitcoin and cryptocurrencies in general—and for a good reason. They’re expanding rapidly, and they have some exciting implications that could affect your life in ways you may not even realize yet. But before we get into that…let’s talk specifics.
Bitcoin Market Cap Surpasses $200 Billion What’s crazy is that this isn’t even a whole year since bitcoin was trading at around USD 1,000. Meanwhile, the world has entered an entirely different economic system where it’s no longer possible for countries to put their interests above their citizens. It’s even possible for an entire nation to declare bankruptcy and continue to operate.
We have put in place a financial system that functions with a straightforward mission: to generate profit for the few at the expense of the many. What’s even crazier is that this is all by design. The system was never made to work for the people; it was always made to enrich the wealthy and powerful. And in 2016, that became more obvious than ever before. Bitcoin provides a way around it all.
A New Method of Payments
Interestingly, the bitcoin revolution is how it operates outside of existing systems and currencies. It doesn’t rely on international banks or governments to be exchanged, which means that they have no control over its value or price. It also makes it possible for anyone with internet access to send and receive payments from anywhere in the world.
A new study has shown that cryptocurrency grew in value to $0.5 trillion in 2018, and it’s not stopping anytime soon. There are now over 1,000 available currencies and tokens, with another 100 or so in the pipeline for release this year.
Supporting the rapid rise of cryptocurrencies is the increasing popularity of exchanges in 2018. In mid-November, I published a new study suggesting that there are now 60 cryptocurrency exchanges available in every major country. As a result, it’s no longer necessary for people to opt for the less convenient storing and moving digital assets. Swapping a few clicks for some conveniences has become more profitable than holding and investing through volatility, decreased liquidity, and market risks.
The benefits of cryptocurrency
Cryptocurrency is digital cash that provides users with greater flexibility in managing their finances. They do not require an intermediary such as banks, traditional payment services providers or government regulators. It also enables them to use their investments to purchase items and services without any value-added tax or other charges.
Cryptocurrencies are the first digital assets that enable fast, cheap and secure transfer of funds anywhere in the world – similar to cash and more convenient than traditional payment systems. While crypto-assets are primarily based on open-source code, they can be easily programmed and customized on top of it.
The best benefit for investors is an increase in price over time due to the exponential growth of market capitalization. If a cryptocurrency’s price increases by 10 per cent every year, its market capitalization will eventually reach 10 trillion dollars.
Poor security and few regulations
Despite the significant benefits that cryptocurrencies have to offer, the market is still developing with many problems to overcome. The most critical challenge is poor security, as many exchanges are going out of business every year after being hacked. In addition, there are not enough regulations to monitor the whole process. Lastly, low liquidity and high volatility remain significant challenges for investors.
To provide a solution to these problems, Finance Magnates Securities Exchange is launching its cryptocurrency exchange in early 2019 – the first one on the market offering more than 50 token listings at launch. It will also incorporate extended functionality such as options trading, proprietary trading tools and algorithmic trading capabilities.
Why are cryptocurrencies prices skyrocketing?
In 2009, one of the best things that happened in the crypto world was the release of bitcoin. In 2012, they developed a new cryptocurrency called Ethereum. In 2013, bitcoin’s success caused a wave of new cryptocurrencies to emerge, with over 700 now in existence.
Bitcoin is a digital currency and decentralized network with no intermediaries or central entities, including banks managing transactions between people and their accounts. “Cryptocurrency is a digital currency or investment asset designed to work as a medium of exchange. It features encryption techniques for security and non-repudiation of transactions to ensure no fraud or manipulation of the system takes place.
One of the main positives of Bitcoin is that it has no central administrator, which can raise its value with minimum consensus.
Another important aspect is that Bitcoin has made transactions cheaper than credit cards, and they are more secure as they do not require personal information related to any financial transactions.
Additionally, in 2014, the largest bitcoin exchange Mt. Gox collapsed after hackers stole $460 million worth of bitcoins from its customers using their (the victims’) own money. This class action lawsuit was settled for $75 million on Jan. 28, 2017.
Bitcoin is currently trading at around $15,000 per unit, which is the highest ever since its inception, which means it has almost 20 times the value than before.
And with 24.9 million bitcoins in circulation and a total value of almost $266 billion,
Bitcoin is the largest cryptocurrency in terms of market capitalization. There have been many debates and uncertainties regarding whether bitcoin should be called a currency or a commodity and whether it would replace cash or gold. However, this cryptocurrency still holds a good position in determining future success. This has been proved by Ethereum’s rise from $8 to $736 within one year, which means it had over 25000% growth.