Bitcoin, which recently celebrated its 11,300th anniversary, has seen its value rise this year. Prices have more than doubled to $ 2019 in XNUMX.
Bitcoin has enjoyed a win streak even in recent weeks, although skepticism on Facebook and its crypto currency Libra stands in Washington and Europe.
It seems that bitcoin fans aren't worried about what will happen with Libra. The simple fact that Facebook has shown such an interest in cryptocurrencies is seen as a validation for bitcoin and other forms of digital payments.
Bitcoin continues to be volatile but the king of cryptocurrencies has more than doubled in 2019.
So, is the return of bitcoin real? Investors can be forgiven if they are more than skeptical. Bitcoin and other cryptos have staged monstrous rallies in the past - just to make them disappear.
In addition, bitcoin is still well below the all-time high of nearly $ 20,000 reached in December 2017.
But this time the spike in bitcoin could be legitimate. There is growing evidence that bitcoin adoption is growing rapidly. For example, the mobile payment company Square (SQ) (the other company of Twitter CEO Jack Dorsey) recently reported an increase in the demand for bitcoin purchases on its platform, App Cash.
China is also taking further steps to embrace bitcoins. Chinese President Xi Jinping recently released optimistic comments on blockchain technology that acts as a ledger for bitcoin transactions, calling the blockchain a "step forward".
The offer could raise the price
Bitcoins are created by a complex process known as mining. It is not as simple as a central bank in a country that turns on the press to issue more money. There is a finite number of bitcoins that will be issued.
According to Matt Hougan, head of global research at the cryptocurrency asset management company Bitwise, there could be a compelling technical reason for being confident about bitcoin. Hougan points out that bitcoin production tends to drop in half every four years, which should lead to higher demand and higher prices.
"The amount of new bitcoins issued (" mined ") is coded in the bitcoin blockchain software every day," Hougan wrote in a report in early November.
He adds that “every four years, however, the amount of new bitcoins produced is reduced by 50%. As a shock in the oil supply, this quadrangular "halving" has historically had a significant impact on prices. With fewer new offers to buy for investors, the price has gone up historically. ”
Bitcoin has become legitimate in recent years thanks to its launch of future trading in the CME.
The best online brokers Schwab (FNDA), E-Trade (ETFC) and TD Ameritrade (AMTD) offer bitcoin futures trading. So too does the red-hot trading app Robinhood, which has become super popular with millennials. There is also a company specializing in cryptocurrency trading called Coinbase which has emerged as a market leader.
Although bitcoin will probably never be an investment for the faint hearted, its best days may still lie ahead.