Cryptocurrency- Hot or not

After a 5 year steep run, the cryptocurrencies has lost steam from 2018 though the last year saw some recovery. Because of no government intervention the rolling asset of the 11 year old blockchain technology has not gained any moss.

Crypto enables fast transactions, cost effective means of transferring money and another feather in its cap is its investors have generated big bucks since its inception.

Several digital exchanges have evolved in the past decade to facilitate trade and investment of this new age financial product. There are signs of

prosperity and fast proliferation in this domain. Bitcoins is one of the numerous kinds of blockchain money.

The formation of the bitcoin trading exchanges has led to huge traded value each day which speaks of the great popularity of this digital currency in the last decade. So, there is high liquidity of bitcoin in the world today.

Regarding its valuation bitcoins are priced by each exchange based on demand and supply. Also, each day numerous kinds of cryptocurrencies are being launched by the people in this field and many investors are getting huge returns on their investments. The investors can redeem their investments into money by selling the digital currency in the blockchain exchanges. Returns of bitcoin investment have catapulted by 9000% in during 2012 and 2017 before declining to abysmal levels in the future. No standard assets such as stocks, bonds, Dollar and gold have ever generated such high returns in the world in the past except for derivatives such as futures, options and credit default swaps.

From $ 65, price of a Bitcoin, that is measured in $, has increased to $ 65000 in 2021. Media coverage too moves its price up or down. But it is mere speculation and no government policies or no macroeconomic factors determine its price unlike other assets and hence this industry has not gained such value even in these days.

Pricing in the colossal progress in technology since Y2K, the crypto market has grown by fast strides and thanks to the growth in international finance coupled with pacy economic growth globally, this digital currency market has high potential in the years to come. Having said that, due to the lack of government policies and existing inbuilt complexities of bitcoin the future potential is reduced as no big players have been enthusiastic about this new money.

Thus this has seen a stupendous decline in the value of bitcoin since 2018. This negative fact has been further accentuated by the double whammy of the fragmented financial system post the Great Financial Crisis of 2008 and the Covid crisis of 2020. So, in the present gloomy scenario bitcoin future seems diffident for the money and I think that this market will see lots of ups and downs in the next 2-3 years. This period will be a decider for the market in the years to come.