In the past few years, few other financial assets or investments have been able to generate as much curiosity as cryptocurrencies have. From being looked upon as the future of global finance, to being dubbed as a medium of promoting illegal trade, cryptocurrencies have come a long way.
Part of the reason you should pay attention to this article is that as you are reading this article, Bitcoin has shot over the $18K mark. At a time when the Coronavirus pandemic has brought the world economy to its knees, the crypto rally has provided much-needed relief to investors.
In this article, we are going to look at the underlying philosophy of cryptocurrencies. Why, how, and when did they become so popular is the core answers we would like to address.
Why have Cryptocurrencies like Bitcoin become Popular?
In order to understand the ‘why’ behind the popularity of crypto, we need to first examine the content behind the emergence.
As some of you know, Bitcoin was launched sometime in 2008-09 by the mysterious entity, Satoshi Nakamoto (we still do not know who he or she is). It emerged in the backdrop of the global financial crisis of the period, which robbed hardworking people all over the world of their hard-earned income.
The global financial crash hit the middle and the working classes the hardest and made them pay for mistakes, they did not commit. While billion-dollar MNCs were bailed out by the government, it was the vast majority, which was forced to fend for itself.
The idea that finance, banking, transaction, and economy are the jurisdiction of the government and the elite in society was challenged. This revolutionary idea of a decentralized peer-to-peer digital currency found some takers. In recent years, the computingforgeeks.com has further added to the attraction of the cryptocurrency.
The idea of crypto being used as a hedge against the faulty policies of the government and global financial industries seems too attractive to pass. The astounding increase in value also acted as an added attraction.
How have Cryptocurrencies become Popular?
As we already stated, the failure of governments and global finance and the devaluation of traditional fiat currencies made people run to other options. Real estate, bonds, gold, and other assets were simply not enough to drive the growth margins, investors were looking for.
The rise in literature, exchanges, and trading platforms coupled with the idea and belief of crypto pushed the popularity index. Social media too played a critical role in spreading the idea, promise, and belief of Bitcoin.
However, very recently, it was the COVID-19 Pandemic, which has acted as the real gamechanger. At a time when governments have been forced to infuse the economy with liquidity, the devaluation of currencies has scared investors. They want something akin to gold, which can act as a solid hedge against the rising inflation.
According to many experts, the pandemic has accelerated the adoption of Bitcoin and other cryptocurrencies in a major way. People who have been laid off, or suffered in their businesses because of worldwide lockdowns, invested their money into Bitcoins.
When did Cryptocurrencies become Popular?
Let us start by presenting you with a brief timeline. On a chilly January morning in 2017, Bitcoin was valued at $1000 USD. Cut to November 2020, and we see Bitcoin seeing its most significant Bull Run. The price now stands at an eye-watering $18000 USD.
However, while this figure is astonishing in itself, I would draw your attention to this year itself. When the pandemic broke in March 2020, Bitcoin fell to as low as $3000 USD. Within eight months, we have seen a 6x increase in valuation. This means that Bitcoin has created several millionaires in the shortest possible time frame ever.
When you compare the growth rates of other assets like gold, real estate, stocks, or mutual funds, it would be safe to say that they are nowhere near Bitcoin or other cryptos.
However, many experts still feel that cryptocurrencies are still very much in their infancy stage. If this is something, which is right, then investing today in Bitcoins would make you one of the earliest founding members of the cryptocurrency.
The Bottom Line
In this article, we have tried to give you a brief idea about where things stand when it comes to cryptocurrencies. There is a definite promise and more and more governments are looking to engage with this new tech in meaningful ways.