Some See Bitcoin As New Gold
Gold enthusiasts like to own the precious metal because it is an asset whose value is not controlled by the government. The value of gold, unlike national currency, will always remain. Bitcoin has many of the same qualities as gold. Bitcoin lives on a decentralized computer network that transcends national borders, and there is no Federal Reserve authority that can devalue it. An analyst cited by Quartz predicts that “gold bugs” will become Bitcoin bugs instead, which means a lot more money flowing into the digital currency.
Both Bitcoin and gold are globally accepted as a store of value. Gold has been used as a store of value for thousands of years, and Bitcoin has become increasingly accepted as a digital store of value in recent years. Both assets are accepted in most countries and can be easily traded or exchanged for other assets. Gold is mined from the earth and traded on global markets, while Bitcoin is mined through a decentralized network of computers and traded on global cryptocurrency exchanges. This decentralization provides both assets with a degree of autonomy and independence from any central authority. Bitcoin shares several similarities with gold, including limited supply, global acceptance, decentralization, security, and volatility. While there are some key differences between the two assets, they both provide investors with a potential store of value and a means of diversifying their portfolio.
Major Investors And The Financial Industry Are Taking It Seriously
Since its inception in 2008, Bitcoin’s biggest enthusiasts have been tech-savvy individuals. Recently, however, they have been joined by a growing number of investors and entrepreneurs who see Bitcoin and other cryptocurrencies as a legitimate asset classes such as stocks and bonds. In 2017, big names like Andreessen Horowitz and Sequoia Capital have bet on hedge funds that are investing hundreds of millions of dollars into digital currency funds. At the same time, the financial infrastructure to support Bitcoin and other digital currencies is maturing rapidly.
There Is A Limited Amount Of Bitcoin Available
There is only 21 million Bitcoin that will ever come into the world – and a majority of them already are. The number of coins created by the mining process decreases by half every few years. Today, around 80% of all Bitcoins are already mined and no new ones will appear after the year 2040. The scarcity may continue to increase the demand.
Bitcoin’s scarcity increases demand because there is a limited supply of Bitcoin available in the market. Similar to gold or other valuable commodities, scarcity creates a sense of exclusivity and value. People are willing to pay more for something that is rare and difficult to obtain.
In the case of Bitcoin, there will only ever be 21 million Bitcoin in existence, and around 19.3 million have already been mined. As the supply of Bitcoin becomes scarcer, people become more interested in buying it, and this drives up the price.
Furthermore, the halving events that occur every four years decrease the rate at which new Bitcoin is created, which further limits the supply. This means that demand for Bitcoin can increase even more after each halving event, as the supply of new Bitcoin entering the market is reduced.
Overall, Bitcoin’s scarcity creates a sense of exclusivity and value, which increases demand for the cryptocurrency. This, in turn, drives up the price and makes Bitcoin a popular investment option for people looking to diversify their portfolio.
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