Bitcoin was once seen as a diamond in the rough. Now it’s a global treasure. By mid-February 2021, Bitcoin hit $53,000 per coin for the first time. That climb is over a decade in the making; the cryptocurrency started in 2009 and was first used to buy 2 pizzas for 10,000 BTC in 2010. In 2013, BTC hit a high of $1,000 before crashing to $300, from which it would take 3 years to recover. The second peak and valley came in 2017-8 when Bitcoin rose to $19,000 before falling by 70% after the US accused two cryptocurrencies of manipulating Bitcoin’s value. Despite the volatility, Bitcoin outperformed even the best stocks in 2019 and attracted new funds and futures as the global economy slowed in 2020.
Why invest in Bitcoin? Given the finite supply and the halving of rewards given to miners every 4 years, Bitcoin is seen as a good hedge against US inflation. With more institutions accepting Bitcoin than ever, including many banks and Apple Pay, it’s become commonplace to use Bitcoin as both a currency and an investment. Proof of Stake, which incentivizes users to “lock coins in the network and ensure operability, has grown prominent in the crypto market.
With cryptocurrencies tearing through records, investors should keep in mind not only the volatility, but the costs of using Bitcoin. In 2017, it took more power to run global cryptocurrency than it did to power the nation of Ireland. In 2020 alone, Bitcoin consumed 120 gigawatts per second. That is the equivalent of power generated by 49,440 wind turbines. As the popularity grows, so too do the risks and costs of using crypto.
Despite the risks, many believe crypto is the future of currency. Don’t get left behind in the mad rush.
What do you think of this infographic? Please share your thoughts on any of our social media pages. You can also comment on our MeWe page by joining the MeWe social network.
Last Updated on April 14, 2021.