Cryptocurrency in 2017: Has the Bitcoin Bubble Burst?

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bitcoin-2007769_960_720Source: Pixabay

For a long time, Bitcoin was the thing to avoid– its value was unstable, it was too complex for the layman to understand, and it was hard to find a store to spend the cryptocurrency. After topping $1,000 against the dollar at the beginning of the year though, the culmination of a 125% increase in value over the previous twelve months, Bitcoin is starting to look like the viable currency its advocates always promised it would be.

Brexit

Even way back in 2008, at the point of its creation, there were good reasons for getting in bed with Bitcoin, both as an investor and a consumer. Tax and inflation don’t apply to the cryptocurrency and the “blockchain” technology behind it offers an ultra-secure, even immutable, ecosystem for commerce. Today, there exists an entire niche of brands and websites dedicated to taking advantage of those traits.

Gaming company Vegas Casino wears its affection for all things crypto on its virtual sleeves, with a blackjack app named after Satoshi Nakamoto, the mysterious inventor of Bitcoin. Once players have signed up, Bitcoin can be used on traditional table games and slot machines, as well as in weekly and monthly raffles. Vegas Casino also offers a 100% welcome bonus up to 1000mBTC to help players get started.

Economic Strife

But will Bitcoin see further growth in 2017 or is the bubble about to burst? The obvious place to begin is with the fact that the cryptocurrency has broken at least four all-time high price records since February 23 2017, when it was valued at $1,186 (the previous maximum, $1,165, had stood since November 2013), including on consecutive days over the last day of February and the first of March. It currently stands at $1,268.

Bitcoin’s value has been trending upwards since January 2015 and, while it’s generalizing a little, one thing is at the heart of that growth – uncertainty. Much like gold, a commodity Bitcoin continues to flirt with for value, the cryptocurrency has earned a reputation as a hedge against inflation and economic strife. It’s no coincidence that Bitcoin benefitted in the wake of two seismic political events last year; namely, Brexit and Donald Trump’s election win.calculator-385506_960_720

Source: Pixabay.

Government Policy

Looking forward, pundits are predicting enormous growth for Bitcoin in 2017 (the value of another cryptocurrency, Ethereum, has also rocketed in recent months), with some of the more outlandish forecasts reaching $3,000 per coin. Again, it’s a lack of confidence in government policy, fiat currencies, and financial markets that’s behind Bitcoin’s increasing renown.

The creation of strategies designed to stimulate the US economy (chiefly by spending more money), could cause inflation to climb and interest rates with it. In such a scenario, Bitcoin, a decentralized and inexpensive currency as far as transaction fees are concerned, may become a surrogate for the dollar in countries like China.

Winklevoss Twins

With our hypothetical dollar climbing and native currencies losing value against it, moving money into Bitcoin is a comparatively secure investment. The same applies in reverse. If the dollar tanks, Bitcoin becomes more attractive as a vehicle for savings and investment, simply because there’s more money to be squeezed out of it in the long term.

Finally, one of the biggest obstacles to mainstream adoption for Bitcoin may be able to crumble. The creation of the first Bitcoin Exchange Traded Fund, a pile of cryptocurrency that people can buy shares in, is awaiting final approval from the US Securities and Exchange Commission. Founded by the Winklevoss Twins, a Bitcoin ETF could make investing in Bitcoin much easier for interested parties.

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