The Future Of Currency, Or A Passing Fad?
Over the years since its inception, premier crypto-currency Bitcoin has had quite a tumultuous history.
The domain name Bitcoin.org was registered on August 18th, 2008, and its come a long way since its inception as a currency. In the very early days of transactions via Bitcoin, forum posters would exchange a sum of 10,000 Bitcoins for the delivery of two Papa John’s Pizzas.
Soon after this, fueled on a train of media hype and public endorsement, Bitcoins EXPLODED. Building off of the fame of media headline after media headline, the currency would quickly become a hyper-coveted form of wealth, with the all-time highest price per bitcoin emerging at $17,900 on December 15th, 2017. Those lucky few who had gotten in on Bitcoin during its highest of highs were cashing in big on massive lump sums of cash, while many consumers on the sidelines were struggling for a piece of the pie.
But the golden ages didn’t last, and the Bitcoin stocks began to fall just as quickly as they had once grown. By February 5th 2018, Bitcoin’s price had dropped to $6,800, losing a whopping 50% of its value in a mere 16 days.
Currently, bitcoins aren’t exactly cheap, however: A single coin is valued at $6,500. And despite what many longtime stock experts might expect, even after the media craze on Bitcoins have died off, their stocks have been anything but predictable.
According to an interview with investment firm Ausum Ventures managing partner Jeremy Gardner via nbcnews, he’s seen Bitcoin’s stock take some incredibly dramatic dips, but claims the currency still has a good chance of making a full recovery.
“I’ve seen bitcoin drop from $20 to $2 and $1,200 to $250,” said Jeremy. “Hyper-Growth followed by a heavy correction isn’t new.”
In addition, Nick Colas, co-Founder of analysis firm DataTrek, believes he understands the truth behind Bitcoin’s odd market trends. And according to Colas, it’s all in our heads.
“It is still a new technology and in the early days of adoption, so there isn’t a lot aside from public confidence to underpin its value. The rhythm of this security is, rumors circulate, there are new financial tools coming to trade it, and then there isn’t, then it goes down.”
In other words, Bitcoin by itself doesn’t have any true legs to stand on. It’s a currency that, at the moment, seems to live and die on media drama surrounding its use and application. However, it is possible that after enough media coverage and public understanding of what Bitcoin is, people will gain an appreciation for the company based off more than just its name, but on the reason it was created: To usher in a new age of online transactions that didn’t have to rely on mutual trust.
And while Bitcoin’s offer for a secure form of digital currency is promising, the fact remains that it has no physical form or backing. Aside from collecting a bunch of USB drives, there’s no way to physically store Bitcoin. The digitalization of the currency is both its greatest strength and its greatest weakness – not only making it more of a target for online hackers, but making it harder for the public to accept that a form of currency they can’t tangibly feel is safer than the dollar bills in their pockets.
But it will still take some time – and quite a few more years of media coverage – for the masses to begin to understand what a bitcoin is and how it aims to solve the security problems that plague digital transactions. Until then, it’ll continue to serve as a form of currency that lives and dies on its trendiness.
Which, all things considered, is how a lot of stock values tend to work anyway.