5 Reasons Why Bitcoin Is Not a Bubble

October 25, 2017

5 Reasons Why Bitcoin Is Not a Bubble

5 Reasons Why Bitcoin Is Not a Bubble

Cryptocurrency has recently demonstrated the impressive increase. Skeptics compared this boom with similar historical events: from the collapse of dotcoms in the 1990s to the tulipmania of the 17th century. Many experts consider that cryptocurrency, notably Bitcoin, is a financial pyramid or an asset bubble, that may disappear. However, cryptocurrency has very different fundamentals than early internet stocks and a much more promising growth trajectory. So, there are five reasons why Bitcoin is not a bubble.

5. Bitcoin is legal tender currency. Despite the fact, that many countries have a precautionary approach to cryptocurrency and statements of Bitcoin supporters that cryptocurrency is not a synonym for criminal world, regulating authority passes the crypto industry. For example, in Sweden, Japan and Philippines Bitcoin is the legal means. This idea will be supported by other countries soon.

4. Legal possibility to pay in cryptocurrency. A lot of famous leading tech companies have given an opportunity to pay for their services and products in Bitcoin, from Microsoft to Amazon. This led to interests of small commercial organizations in cryptocurrency. More than that, fees are lower than for credit card payments, chargeback fraud is entirely eliminated.

3. Bitcoin is acting as a store of wealth. Cryptocurrency is very popular in poverty-stricken countries, for example, in Venezuela, Bolivia and Zimbabwe, where cryptocurrency is a mean of hoarding and spending currency because local currencies are weakening into worthlessness. In other words, wherever there is economic distress, cryptocurrency popularity will likely rise.

2. Recent emergence of Bitcoin. Bitcoin popularity is increasing. At the same time demand for cryptocurrency from new investors is increasing too. Most of stocks and institutional investors have an idea of investing in Bitcoin.

1. Bitcoin and its supply are limited. Overall number of Bitcoin is only 21 million coins and the rate at which new coins are created slows down over time. As a result, the increasing demand for the digital currency meets with a limited total supply.

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