Hey! Have you been following the news lately?
If so, then you may have encountered some ups and downs in the crypto world. The whole thing might be a bit confusing but let me break it down for you.
Bitcoin is currently facing challenges. However, despite all this, I think that it is on the brink of something massive.
So first things first: what has been happening?
Lately, Germany sold lots of Bitcoins which led to a drop in their prices. Additionally, Mt. Gox is refunding people with Bitcoin thus increasing its supply. This put a small dent in prices. That sounds bad, right?
Well not quite.
This is what makes me not lose hope. As much as there have been setbacks, Bitcoin shows some promising signs of making a comeback. A major reason for this is the global economy. Currently, the largest economies such as G-7 countries are experiencing growth in their economies. When economies grow, people tend to feel more confident about investing in things like Bitcoin and stocks. It’s like when you see a wave coming and know it’s going to lift you—you want to ride that wave, right?
Additionally, inflation has also become an indicator worth considering. Inflation rates have slightly declined which is very encouraging news. What happens when prices become less volatile?
Central banks such as the Federal Reserve have more room to cut interest rates. Lower prices can make non-traditional investments such as Bitcoin seem more appealing to investors looking for higher returns than savings accounts with banks.
Speaking of comebacks, technology shares on Wall Street are soaring to new highs. This bullish attitude regarding technology impacts digital currencies, such as Bitcoin.
So why is this important? Bitcoin can be compared to gold in terms of its value as a store of wealth, especially during times of uncertainty. For instance, when traditional markets are turbulent, it is not uncommon for investors to flock towards gold or bitcoin which they perceive as more secure bets.
Now what?
If you ever thought about diving into the cryptocurrency world do not hesitate any longer. Certainly, some homework and investing only what you can afford to lose should be a priority. Cryptocurrency markets are subject to fluctuation; nevertheless, they also provide exciting opportunities for individuals who can endure through the ups and downs.