Is the Bitcoin Craze Going to Last?
Digital currency mining has taken the world by storm in the recent years. Investors have jumped on to this platform due to the enormous returns they get owing to the lack of regulation thus riding a massive bull run unlike in the stock market. Bitcoin has proved to be the superior crypto currency. Bitcoin users are growing in huge numbers by day, and this has forced companies to accept Bitcoin as a mode of payment during purchase. Currently, one Bitcoin is selling at $17000 as of
December 2017 from $2000 in January, this is a steep rise in the price and investors argue this will continue and reach $40000 by the end of 2018. Will the Bitcoin craze come to an end? Yes, this current bubble over crypto currency
will come to an end but not anytime soon. This stems from the word that some Wall Street investors are also on the verge of joining in the digital currency mining thus causing a craze about Bitcoin. Regulators around the world have been put Bitcoin use in the limelight.
Financial regulators are spooked about the recent development on the use of Bitcoins. The regulators have not regulated Bitcoin mining in the country of use. Eyes have been drawn on Bitcoins usage as a means of exchange. The regulators are seen to require Bitcoin to provide personal identities of the users as move on been able to tax the users and collect revenue from its users which was not the case in the past. The financial system is also on alert with some banks fearing that trading in future will be too volatile thus undermining the exchange stability. Thus the regulators are cracking down on these users for the state to also reap from this bubble.
Bitcoin cannot be an alternative to replace fiat currencies. Fiat currencies are free from interference from the government and for Bitcoin to replace them the government will have act as an umpire between transactions. Volatility and transaction
costs are another reason why crypto currencies cannot replace fiat currency with Bitcoin users complaining of slow processing delays, and this makes Bitcoins not suitable for small everyday transactions. Bitcoin prices have not been stable also with at times having fluctuations in the price thus merchants will not prefer the use of Bitcoins to price their products and if it used it used pricing a product with Bitcoins at the current rate will be expensive for the
Bitcoins is a deliberate store of value that mimics gold. Like gold, Bitcoins have no money flows and practical duty like other commodities and therefore gauging the value of Bitcoins is futile since no monetary value can be attached to it as it is priced not valued. Despite this similarity to gold, the use of Bitcoins cannot replace the use of gold given its long history and its acceptance by society to represent wealth.
The government’s crackdown on these digital currencies, inability to be used as an alternative for fiat currencies coupled with a large number of people still not being able to understand how Bitcoins work will cause an end to the craze on crypto currency. The ending is near due to the inability of more and more investors failing to adopt the Bitcoins in their investment options will cause the end to come faster than expected.