Cryptocurrencies have seen their share of the market rise over the past year. Some have been a hit with mainstream investors, while others have struggled to gain traction. But one asset has been able to break into the limelight with an incredible surge: Bitcoin.
Before Coinbase’s landmark IPO, Bitcoin has hit a record high, climbing as much as 5% on Tuesday to reach $62,741 as of this writing (up from $60,590 just a few hours before). But the currency’s gains have pared away somewhat to trade around $6247.
Bitcoin is a digital currency that operates using a distributed ledger system called the blockchain, which records each transaction in chronological order. It’s based on a protocol that limits the number of Bitcoins that can be mined, making it an essentially decentralized form of currency.
The price of Bitcoin has risen dramatically in the last year, as more and more investors have seen the potential for this digital currency to grow. Many see it as a means of payment or an alternative to conventional money, though some have also seen it as a potential speculative bubble that could crash in value.
That’s why it’s important to understand what Bitcoin is and how it works. This is especially true if you’re thinking about investing in the cryptocurrency.
It’s the most well-known and widely used digital currency, but there are other options out there. These include Litecoin, Ethereum and Bitcoin Cash, among others.
While these are more widely recognized, there is still a lot of interest in Bitcoin, which has grown significantly since its peak of nearly $68,000 in early 2021. The digital currency is gaining a foothold in the tech world, as more companies are starting to offer services that allow users to purchase and trade cryptocurrencies.
As a result, some analysts expect this trend to continue. They see a strong likelihood that cryptocurrencies will become more popular with the public, and they believe that companies will be able to benefit from this.
But they also warn that a collapse in the network could result in massive losses, similar to what we’ve seen happen with turbocharged tech stocks over the past 15 months.
This is especially true for Bitcoin, which has no real intrinsic value and only a limited supply of 21 million units. That’s why it can be so volatile – and why some investors think it’s likely to drop even further in the future.
Some people who are long-term investors have seen that as an opportunity to get in on the action before prices fall. But others are concerned about the volatility of cryptocurrencies, and their riskiness, particularly when governments may try to shut them down.
What’s more, some argue that Bitcoin and other cryptocurrencies are vulnerable to manipulation. The fact that no centralized authority has any control over the supply of these assets makes them susceptible to manipulation by individuals and groups with access to large amounts of capital.