Tired of listening to people go on and on about how they got richer thanks to Bitcoins? Trust me, we’re all regretting not buying bitcoins more than Lyndell Locke regrets ruining his chances with Beyonce.
But what’s creating this FOMO when bitcoins are literally backed by nothing, lets find out:
Unlike dollars or other currencies backed by their country’s central bank, bitcoins are backed by nothing:
No one knows the person who’s invented it nor do they know his location. For all you know Satoshi Nakamoto (Apparent founder of bitcoin) could be a genius kid sitting behind his/her computer. So tomorrow if they declare that bitcoins are banned forever and you want to redeem all your bitcoins for some real cash you can’t go to your country’s central bank, you’d have to track down Satoshi Nakamoto.
Then whats driving it so insane:
Pure demand and supply: If something or someone is famous (even if its for doing absolutely nothing just like the Kardashians) its got to be worth a lot of bucks. Bitcoins are famous and they are limited in supply and that’s why they are so damn expensive. Supply/Demand is a simple economic factor driving the price of Bitcoins.
The fall and rise of Bitcoins in the past:
The best thing about Bitcoins is that its not controlled by anyone. So just how British Pounds drastically fell after Brexit and all the people with pounds were crying, bitcoin holders have the confidence that no government influence can control their currency value. That’s why more and more people have started buying them and the more the demand higher will be the price.
Famous people have criticized bitcoins calling it a bubble and one of the biggest mistakes to happen. According to them cryptocurrencies are a fraud which will burst in the future. When experts like Warren Buffet throw their opinion on bitcoins people lose faith in Bitcoins and sell it bringing down its value. Another reason bitcoins value fluctuates and falls is when people start selling it to make profits when its at an all time high. The major downfall of Bitcoins was when it was involved in fueling cybercrimes.
Boom or Bubble:
Although heavy bodies such as investor Warren Buffett and Nobel laureate Robert Shiller have called it a bubble, the supporters of virtual currencies have not cared a bit. Instead they have started to bet, that virtual currencies will ultimately get accepted as alternative currencies in future, making them immensely valuable, especially because supply of currency is limited by design. So the people who once believed in using and investing in cryptocurrency have continued to do so. Any sort of bubble has not affected their belief.
But if I were you I’d not take my chances….
You should only buy bitcoins if you have money to lose. You never know when the price will rise or when it will fall. Bitcoins are based on pure speculation. And currently if you want to buy bitcoins here’s how much one bitcoin will cost you: Rs. 12,22,321.22! Wow, do you actually have that much money to lose? Instead you can invest in alternate cryptocurrencies like Ethereum that would cost you around Rs. 45,564.05. Its value fluctuates with fluctuations in Bitcoins.
If you still have more questions about this crypto fad? Comment to let us know!