Bitcoin is on its last legs
You google for "Bitcoin" again
More bitcoin whales
However, the latest increase seems to be on a more stable footing than it was three years ago. In 2017, the Bitcoin price had increased almost twentyfold before giving up almost 80 percent of its value in the following year. At that time, private investors in particular drove the price up. They have now returned, but institutional investors who wanted to add Bitcoin to their wealthy customers have recently generated greater demand.
The “Whale Index”, which counts cryptocurrency accounts with credit balances of at least 1000 Bitcoin, has reached a record high, Reuters quotes Phil Bonello, chief analyst at the asset manager Grayscale.
The fact that a consortium around Facebook wants to issue its own crypto currency and numerous central banks (including the ECB) want to launch state crypto currencies makes Bitcoin appear increasingly less exotic. Especially since Bitcoin offers advantages that the central bank projects do not have: It is decentralized and limited.
Bitcoin is not issued by any central bank or state, but by a decentralized network. New Bitcoin are created when computers confirm transactions on the Bitcoin blockchain. The maximum number is limited to 21 million Bitcoin, around 18.5 million have already been mined (some of them may have disappeared again because the owners lost their access codes).
As a scarce commodity, Bitcoin should be able to defy inflation, similar to gold.
Bitcoin is used to store value. Critics believe that such a volatile asset is unsuitable for safekeeping. But despite the extremely strong fluctuations, there has been a long-term upward trend to date.
And despite the growing interest, the search queries on Google are not even half as numerous as at the peak in 2017. The price increase this year was almost four times lower than before the last peak three years ago.
Store of value instead of money
Bitcoin has still not made the breakthrough as a means of payment, even if the number of merchants who accept it is growing and the payment service provider PayPal has recently accepted Bitcoin. Among the cryptocurrencies (the number of which is now five-digit), Bitcoin is by far the number one: All cryptocurrencies together have a market value of 734 billion dollars, as figures from Coinmarketcap.com show. Bitcoin accounts for $ 515 billion. This magnitude is important in terms of where Bitcoin can go.
For comparison: all stocks in the world combined are worth more than $ 100 trillion, Apple alone is worth over two trillion. The market value of all gold is estimated at ten to twelve trillion dollars. Compared to that, Bitcoin still has upside potential.
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