For the past few years, cryptocurrency has been stealing every headline to become the latest buzz. What was once popular only in the science community, is now a topic of discussion at almost every gathering, real or virtual. But why are people paying more attention to cryptocurrency all of a sudden? Why are the prices skyrocketing? Let us take this time to understand this.
In simpler terms, cryptocurrency is a decentralized digital currency, a medium of exchange, which is not issued by any central bank or financial institution. They can be bought and sold via cryptocurrency exchanges, where price fluctuations are visible. The reason why cryptocurrency has boomed is because of its ease of transfer. To exchange cryptocurrency between two parties, there is no need for a third party or a middleman.
Another reason why people are attracted to cryptocurrencies is their value. Investing in cryptocurrency is like investing in the stock market. When Bitcoin was launched in 2017, its value was a few $100. Now in 2021, Bitcoin hit its all-time high price of $62,000. This growth is enough to tempt people into investing. Not just Bitcoin, other cryptos like Ethereum, Litecoin, Dogecoin, and Cardano have followed a similar growth trend to become one of the highest valued cryptocurrencies in the market.
Apart from the value, the other thing that attracts investors is its privacy feature. Cryptocurrencies are built on blockchain technology, which is touted for its security and privacy. The transactions made cannot be traced so easily as they involved navigating through a series of web transactions.
Banking and financial institutions levy charges on everything. If you travel overseas, you will have to pay a fee to use your credit card. If you want to open a bank account, you will have to pay a fee to maintain it. These charges, when added, resulting in a big amount that can be avoided using cryptocurrencies. The fee for using cryptocurrency is very low, which makes it an ideal choice for all kinds of transactions.
When Bitcoin was launched, obtaining cryptocurrency was difficult. Only the people who could mine crypto coins would have it. But that is not the case anymore. They can be easily bought from crypto exchanges and investors have lots of options to choose from if they don't want to buy the most expensive cryptocurrencies like Bitcoin and Ethereum. From novice traders, short-term investors to long-term investors, there's a crypto coin for everyone. While Bitcoin has become synonymous with the term cryptocurrency, other popular cryptos are Dogecoin, Ripple, Matic, and Binance Coin.
The recent news about the crypto market crash has certainly reached everyone. When the Chinese government announced the ban of cryptocurrency in the territory, every crypto coin took a hit and turned red. Even at such a time, investors who believe in its potential saw the low prices as an opportunity to invest more. With more businesses and institutions welcoming cryptocurrencies, the possibility of cryptocurrency becoming a legitimate form of payment in the future is only becoming stronger. Right now, as the market is under correction, the sky's the limit.
Join our WhatsApp Channel to get the latest news, exclusives and videos on WhatsApp
_____________
Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.