In many ways, bitcoin operates like the stock market. It goes up, it goes down, it has its good days, and for a while, seemed to have endless bad days.
Now, bitcoin is readying itself to jump beyond the $11,000 mark, and crypto-enthusiasts are waiting with bated breath. This is a moment they’ve all been waiting for – not only has bitcoin struck gold, but it has also found mainstream acceptance. Many believe this is just the beginning for bitcoin, and more jumps are likely to happen soon.
Bitcoin Is the Stock Market’s Greatest Challenge
With the consistent comparisons, one can’t help but wonder if bitcoin serves as a direct competitor to the stock market. With cryptocurrency steadily rising beyond anyone’s expectations, many are questioning if there’s even a place for the stock market in America’s future. Is it possible that the NASDAQ will disappear altogether and the world of cryptocurrency will take over as the primary investment pool?
One source claimed that bitcoin could soon surpass Apple’s value. The tech company synonymous with Mac computers and iPhones may disappear in the dust of bitcoin’s sudden race forward, but even still, it doesn’t look like the stock market is going anywhere anytime soon for a few different reasons…
According to The Motley Fool, one of the reasons cryptocurrencies are moving up so easily is because they “lack government backing,” and can thus be manipulated far easier than anything in the stock market.
This is both a strength and a weakness in the sense that while the price can move quicker and easier than those of stocks, far less is known about cryptocurrency, so even though bitcoin may be trading on a higher scale than most market bonds nowadays, we still recognize products and aspects of tradeable companies very much like Apple.
Cryptocurrencies Aren’t Fully There Yet
Despite bitcoin’s inherent rise to fame, stocks remain a little more accessible for the time being. That’s not to say things couldn’t change in the future, but for now, mega-companies like Amazon are experiencing daily jumps on most options, and several investors still view stocks and bonds as valid opportunities worth exploring.
Furthermore, organizations like the Bitcoin Investment Trust, which closed last August holding a value exceeding $1 billion, allegedly made their money through heavy fees and premiums. Others, like First Bitcoin Capital Corp., have experienced suspensions and trade halts in their schedules following accusations of lying to coin-holders about the values of their holdings and the accuracy of company information.
It appears there are still kinks to be worked out precisely because there is no central regulator; many are still using cryptocurrency as a way of depleting others, and until all potential loopholes are closed, digital coins aren’t likely to classify as perfect machines.
But Here’s One BIG Benefit
But where bitcoin and cryptocurrency does have an advantage, however, is that they can hold steady where the stock market might not.
The fact that cryptocurrency isn’t monitored or regulated by the same hand as stocks is what allows it to stand against the same threats the stock market has faced since the late 20s.
Certain upgrades and forks, like Ethereum’s post-DAO effort in 2016, have kept customer information secure, and help to protect coins against malicious activity. (True, bugs and exchanges have sometimes had the opposite effect).
Bitcoin’s embedded software makes it relatively difficult to read; this serves as another push against the dangers of a harsh crash, and granted the stock market ever fails investors again, cryptocurrency could serve as a steady haven for one’s earnings.
Learn From Both
The point is that no system is top-notch – there are twists and turns around every corner, but if one understands the power of diversity and realizes the capabilities present in both arenas, stocks and cryptocurrencies are two entities that can continue to work off each other and with each other to better their own defenses against future monetary threats.
Do you feel bitcoin has become more powerful than the stock market? Post your comments below.
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