For a few months at the end of 2017 and the beginning of 2018, Bitcoin mania took over the world. A cryptocurrency, or form of electronic cash, Bitcoin was the first decentralised digital currency, a system whereby these is no central bank or administrator. Created by an unknown person or group, the software was released in 2009 and kept going by “miners” who facilitate peer to peer transactions. In 2017, the university of Cambridge projected that there were over 5 million unique users using a cryptocurrency wallet.
Peaking at around $19,000 dollars, cryptomania exploded. However, the currency’s short-lived boom came and went as quick as its rapid downfall. Within weeks of reaching its peak, Bitcoin’s price had fallen to under $10,000. For the few weeks that it grew and grew, cryptocurrency investors were in heaven. For a short while they felt indestructible, unable to put a foot wrong even if they tried.
The rise of Bitcoin was astonishing. For years it had little growth but within the space of 4 months, it rose beyond belief. As it’s rise became mainstream news, investment increased. Bitcoin became a talking point on television and radio stations around the country as well as in coffee shops and bars, in much the same way a huge sports game would, the public’s imagination was well and truly captured.
But once some bad news began filtering through, the end was nigh for the Bitcoin’s brief presence in the public eye. Reports circulated in the media that South Korea, a country with high cryptocurrency trading, was going to crack down on trading in the country and investors became scared. Those who had made thousands began selling up, while others who had bought too late followed the same path. Others came in late to make a quick buck and temporarily drove the price back up, but the damage had been done and the price crashed by thousands within days and weeks.
Bitcoin, and cryptocurrency in general, is seen by investors and enthusiasts as the natural replacement to national legal tender. However, this belief is definitely not held in financial institutions who believe that bitcoin and its fellow cryptocurrencies are heading to a value of zero. The current volatility of the currency makes it unfit for use in purchasing goods as the price changes often and in high amounts. While according to some economists, it has volatility 18 times greater than the US dollar and seven times greater than gold.
Volatility isn’t the only criticism bitcoin has to deal with. Critics have found fault with the energy consumption involved in mining cyptocurrency, used to power and cool processors. Just like any currency it has been linked to criminal activity while others have voiced the opinion that it is a Ponzi scheme however the Swiss Federal Reserve and World Bank stated that these claims are false
Bitcoin has its detractors but just like any investment, there are risks involved, so however great the rise, the fall will be greater.
Megan DeGrom was born and raised in New Jersey just outside the Pine Barrons. As a journalist, Megan has contributed to many online publications including Rotten Tomatoes and Variety. In regards to academics, Megan earned a degree in business from St. John’s University. Megan covers economy stories here at Clear Publicist.