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Despite its immense popularity in the digital space, there isn’t much marketing for the currency in a traditional sense. You’re not going to see Bitcoin ads on the TV or anything like that.
That unfortunate fact means that a lot of people are out of the loop when it comes to Bitcoin. If you’re one of these people, then fear not. The team is here to break Bitcoin down into its simplest parts to help you understand the concept better. Let’s start at the most rudimentary level. Bitcoin is a currency, not unlike dollars and euros. It can be used at certain retailers and online places to buy goods and services. However, unlike traditional currency, Bitcoin doesn’t have any physical representation of value. Every fiat (physical) currency utilized by different companies around the globe all have physical denominations. Typically, in the form of coins and notes. Bitcoin is 100% percent digital, meaning there is no physical cash variant for you to put in your pocket and bring to the supermarket with you. Bitcoin is a digital currency. It exists solely in the digital space. A lot of people mistake this as a lack of security and value, but that isn’t the case. Despite only existing on a screen, what makes Bitcoin hold value is its creation process. Each Bitcoin unit is made up of a series of complex algorithms and code, and each one is unique. It can’t be replicated or forged. This is where the value of the coin comes from.That’s the biggest difference between Bitcoin and some of the other currencies you have the option of investing in, but the differences go much deeper than that. Bitcoin isn’t accepted in as many physical stores are traditional currency. This should come as no surprise, especially given that there is no physical item to trade. That being said, a lot of places accept cryptocurrency purchases online, and the number of vendors accepting it as a valid form of payment increases daily.
Bitcoin is also decentralized. When a country needs more money, dollars, for example, the bank prints more dollars in collaboration with government officials, and these institutes decide how much to print and when to print it. It’s this process that has resulted in a lot of the world’s currency depreciating in value. How much a dollar is worth now is not equivalent to how much it was worth 20 years ago. The economy has scaled with the depreciation, but only to a certain extent. The effects of this are particularly visible when you look at the housing market. The price of a house is significantly higher than it was in the past. There are a number of contributing factors to that, but the increase in the supply of money is a major one. Bitcoin doesn’t have a central institute with the power to make decisions like that. It operates independently of any major conglomerate, meaning it’s less likely to depreciate in value and also resistant to hyperinflation.
The history of Bitcoin is full of ups and downs. You’ve probably heard of the great boom of 2017. This was the year that Bitcoin really began to grow in value. So many people were hopping on the trend that it became a bubble.This period of time made a lot of people very skeptical. However, it also bankrupt a lot of people once that bubble popped. Cryptos are not perfect.To put this into perspective, at the highest point of value, a single Bitcoin was worth nearly $20,000 dollars. By that time next year, it had crashed to $3500 per unit. This was still a lot higher than what Bitcoin was trading for before it jumped in value, but you can see why a lot of people are afraid to get burned. However, the fact that this happened is a good thing. It means that a new industry has gotten this out of its system, making it a safer investment for you. As of July 2022, Bitcoin is valued at around $21,000. Not only is this up dramatically since the crash, but it is also on par with what it was worth at the start of the year. What’s the point of that, you ask? Well, every single market in the world took a massive hit in March 2020, when COVID-19 became a global pandemic. Many of these markets are still reeling from the side effects, and many of the world’s economies have gone into recession.Bitcoin, on the other hand, bounced back quicker than anyone could have expected. It took an initial hit, sure, but it made a staggering recovery. This is the first global emergency that Bitcoin has ever had to endure, and the fact that it held so well is great news for you.
Trading with Bitcoin Prime
Despite being a currency, Bitcoin doesn’t have too much in common with trading currency on the Forex. For starters, Bitcoin jumps in value a lot more than a typical currency. One unit of Bitcoin is also worth a lot more than one unit of any other fiat currency.Due to these qualities, Bitcoin is sometimes called digital gold. This description isn’t entirely inaccurate, either. Trading Bitcoin is a similar process to trading commodities. It’s considered a relatively safe investment that is expected to only grow in value. That’s the way you should be thinking of it. Don’t look at it like buying euros with dollars, instead view it as investing in a commodity, either for long-term growth or short-term trading.This mindset is actually a major factor in why Bitcoin recovered from the pandemic so quickly. Traditional investors saw that the future of many companies was up in the air, so they moved their money into Bitcoin. While you don’t need to be thinking on this level to trade Bitcoin with Bitcoin Prime effectively, it is something that you should keep in mind.
