Bitcoin is now trading for over $10,000 USD. Sure there have been some ups and downs since it first hit that mark just a day ago, but at press time Coinbase still has it at a very respectable $10,700. Still, doubters persist in telling us it’s not real.
Why So High All of a Sudden?
The jump to the 10K mark occurred officially last night, and signs are suggesting it wasn’t a fluke.
Additionally, bitcoin is in high demand in countries like Zimbabwe (despite its apparent illegal status), several million bitcoins have recently been classified as “lost” and officially out of commission (striking up images of a shortage and potentially increasing the demand), and the recent hard forks that have birthed bitcoin offspring, including the popular bitcoin cash (now trading for over $1,600) may all have something to do with the hike.
Furthermore, several financial entities, including the CME Group, are allowing bitcoin futures trading as early as next month. For lack of better terms, it appears bitcoin’s wings are spreading – its reputation is growing every day, and it seems to be on a die-hard mission to prove itself.
There’s Always a Negative Nancy (or Two)
So why are there still so many doubters? Price rises alone aren’t enough to convince everyone, as they look for signs of enduring value and real-world utility. Remember those “dotcom” companies in the late 1990s, raising IPO millions with temporary offices and few customers.
Following the recent jump that pushed it over $10K, there could be similar reasons why some still view bitcoin as a “con” or a bubble. There seem to be people who want nothing to do with it. They’re crypto-soothsayers of sorts, who predict that the market will eventually come crashing down on all of us, and our trust in cryptocurrencies will be to blame.
Neil Wilson, a senior market analyst at ETX Capital, said “prices are in a bubble for sure – people are buying for speculative (reasons) only, and that is when you have to worry it’s a proper unsustainable bubble.”
Some People Have Trust Issues
From the look and sound of it, many don’t trust bitcoin the way they should, and it seems the steady price hikes over the last year are partly to blame. In most investors’ eyes, something that rises that quickly isn’t necessarily real, and is the subject of grand manipulations occurring behind closed doors.
One thing that seems to have everyone on the fence is whether there’s no backing behind bitcoin or its crypto-cousins; no central figure regulating the strings, which means that if a stash is lost (as we’ve witnessed in recent news), it’s lost for good. Most investors believe it’s dangerous to put all of one’s fortune into crypto, especially when the technology still classifies as within beta phase.
Additionally, many traders, according to one source, label bitcoin as something of a “fool’s asset.” Unlike real estate, which can be rented out for a profit, the only way to make money is by selling it to someone willing to pay a higher price than you.
Lastly, bitcoin has birthed a few questionable entities including Bitcoin Gold, which was the recent subject of a wallet scam that resulted in $3 million stolen funds.
Bitcoin Is Still a Winner
In the end, however, none of these ideas is enough to label bitcoin as a Ponzi scheme or anything along those lines.
If anything, we’re witnessing bitcoin reach a star that’s never been touched. Coinbase’s recent addition of over 100,000 accounts shows people are becoming more educated about the advantages (and issues) involved with crypto. They are continuing to purchase bitcoin despite the risks, and the technology behind it is becoming more familiar to mainstream audiences.
We’re no longer witnessing the usual signs of classic “pump-and-dumps” that have become synonymous with questionable currencies. We’re seeing a legit currency grow along with the group following it, and its status as international cash is expanding daily.
So, if bitcoin’s value continues to beef up, the knowledge of investors will do the same. We can hopefully avoid all the mistakes and problems that have occurred in the past, thus cementing bitcoin’s status as a worthwhile (and solid) technology.
Where do you see bitcoin heading after this? Will it continue to jump up or “correct” itself? Post your comments below.
Images via Pixabay
This article is presented for informational purposes only, and does not constitute financial advice. Bitsonline is not responsible for any gains or losses incurred while trading bitcoin, or any other digital asset.