Primed by a recent $1.5 billion investment in Bitcoin from Tesla, the cryptocurrency market has surged again. In fact, the value of an individual Bitcoin has exceeded the U.S. economic outlook prediction that it would hit the $50,000 mark. The world’s biggest cryptocurrency recently reached a record high of $60,000. (Its last closing as of March 16, 2021, was at $55,656.)
More volatile than the stock market, Bitcoin has had a year-to-date astonishing increase in value of 91.91%. It’s 12-month growth was also a stratospheric 915.57%.
Once considered a fringe currency, Bitcoin has entered the mainstream. Now trading on the stock market, major companies such as Microsoft, AT&T, and overseas franchises like Burger King and KFC accept Bitcoin. Travelers on Virgin Galactic and Norwegian Air can buy tickets using the digital currency.
Users can also convert Bitcoin to cash in some ATMs, but don’t plan to pay for a hotel room with Bitcoin, as hotels generally don’t accept it. However, there are Bitcoin debit cards issued by Visa or MasterCard that you can load up with funds via a Bitcoin account.
Such remarkable growth in value from less than 10-cents in its early days, has defied analysis. Not even the skeptics nor the believers—including its inventor Satoshii Nakamoto—have the vaguest idea of what the future holds for currency that’s not really currency and whose value has nothing to do with traditional concepts of unified use.
Predictive scenarios run the gamut from Bitcoin thriving and becoming “digital gold” and a bastion against currency inflation, to governments’ cracking down and ruining everything through taxation and regulation.
Many financial gurus and analysts come down on the bullish side. For example, Shervin Pishevar, a venture capitalist who co-founded Hyperloop One and Sherpa Capital, predicts Bitcoin to reach $100,000 by the end of 2021. Chamath Palihapitiya, founder of Social Capital and co-owner of the Golden State Warriors, predicts Bitcoin will reach the $1 million mark by 2037.
Other observers look at Bitcoin as a volatile risk in a fluctuating market. While anonymous and secure, Bitcoin can be irretrievably stolen if someone gets the user’s key. There is also a fair amount of fraud on the open Bitcoin market, including fake exchange sites where investors can be duped out of their Bitcoins through fraudulent transactions.
Also, unlike bank currency exchanges, Bitcoin has little or no government regulation. The good news is that most governments have no clear policy or taxation on cryptocurrency. As Bitcoin and other cryptocurrencies continue to compete with traditional banknotes, look for that to change.
Whatever its future, Bitcoin provides unique investment avenues. The best ways to make money with Bitcoin include standard bank currency trading, long-term investing in blockchain development, or becoming a Bitcoin “miner.”
Mining Bitcoins requires the technical know-how and high computing power. Not for the timid investor, cryptocurrency mining is the foundation of both the value of the currency and why it works in the wilds of the internet. Bitcoin miners receive their rewards with tokens by actually running the system. Those tokens eventually become free Bitcoins, or as the saying goes, “pennies from heaven.”