Editor’s Note: To view the video report on this story, click the arrow above.
LOS ANGELES – These days, people can’t turn on the TV or visit a news website without hearing about bitcoin and cryptocurrency.
Last week, Coinbase, a cryptocurrency trading platform, made its Wall Street debut and immediately brought the crypto market to the mainstream. Coinbase stock rose as high as $ 430 before falling 24% to $ 330 on Monday April 19.
What you need to know
- Bitcoin and other cryptocurrencies have gained traction and legitimacy
- The listing of Coinbase, a company specializing in the exchange of cryptocurrencies, on the Nasdaq is a big moment for the crypto industry
- The price of Bitcoin has increased more than 1,000% since the COVID-19 pandemic began, from a low of $ 4,900 in March 2020 to $ 56,000 on April 19
- This could be the beginning of the golden era of cryptocurrency
The price of a bitcoin, which is the leader in the cryptocurrency market, also soared along with Coinbase listing, hitting a high of $ 64,000 last week. As of Monday, the price of a Bitcoin fell to $ 56,000, but some expect the price to rise as the industry matures and more people learn more about it.
“Coinbase’s listing on Nasdaq is a big moment,” said Glen Goodman, author of The Crypto Trader and former ITV and BBC reporter. “Many longtime crypto haters have made an abrupt U-turn this week, deciding that it is a mature industry. They cannot ignore the fact that the most respected crypto exchange is now part of the mainstream financial world. Crypto clearly is not walk away.”
The listing of the astronomical price of Coinbase and Bitcoin underscores the increasing acceptance of cryptocurrencies as a legitimate investment. According to Bloomberg, the crypto market has grown into a $ 2 trillion industry in less than a decade.
But many investors are still wondering if the cryptocurrency market can keep the momentum going. How high can Bitcoin and other cryptos continue to rise?
Goodman recalls when Bitcoin was trading for $ 300 in 2014. He’s been trading Bitcoin now and then for five years. The high price of digital currencies does not surprise him.
“It is impossible to make a ‘fair valuation’ like we do with stocks because there are no profits or revenues to base a valuation on. So, in theory, it can go up to any number you want to mention.” said Goodman. “Its price moves in waves of several years – a massive uptrend, followed by a major downtrend and a repetition. We will no doubt see the same pattern at the end of this bull market. Trending traders like me stick to the maxim.” Follow the trend to the end when it bends. ‘So far the trend has remained decidedly upwards, but I always pay attention to the possible bend. Then I sell. “
Goodman spoke to Spectrum News 1 and provided an overview of what people should know about Bitcoin and the burgeoning cryptocurrency industry.
What is cryptocurrency?
Cryptocurrency is virtual money that is usually produced by a decentralized computer network. This is a lot like video game money. When you play Fortnight or Roblox, they have their own form of in-game currency. However, proper cryptocurrency is decentralized, which means no one is responsible for it. There is no company like the Roblox company that can decide how much the currency is worth or close it down.
How are Bitcoin and other cryptocurrencies generated or mined?
Decentralized currencies like Bitcoin are developed using computer code. After the app is up and running, it will run automatically with the help of users who will be rewarded with coins for maintaining the system.
Bitcoin was set in motion by a mysterious figure named Satoshi Nakamoto who wrote the code and got the program working in 2009. The code enables the creation of a certain amount of new Bitcoin on a daily basis. But only a certain amount, so it is very limited in relation to the new amount. Because of this, people consider it hard money, much like gold, because you can’t just print an infinite amount like you can with the dollar.
Many other cryptocurrencies are based on the Bitcoin program, with some tweaks here and there. Some are centralized, meaning that a company created them and decided how many tokens to be released using code.
If it’s a computer program, why can’t the average person run it and mine bitcoin?
It is expensive and heavy and requires special computers. The program includes the function that the more people mine it, the more difficult it becomes to create a new currency.
(In February, the BBC reported that mining Bitcoin uses more electricity annually than Argentina, the Netherlands, and the United Arab Emirates.)
What’s the attraction here? What is driving this demand for Bitcoin and other virtual coins?
What drives the demand is the new narrative. In 2017, people said everyone would use this digital currency to buy their coffee at Starbucks. It will be everywhere. We’ll all use it. That’s why the price has fallen. There was no use case. (Bitcoin was priced at over $ 20,000 in 2017, an all-time high before falling to $ 3,000 the following year.)
Then the pandemic happened. In my opinion, the pandemic caused Bitcoin to rise from the dead. When COVID-19 started, the U.S. government decided to print new money to send to ordinary American citizens and put more money into the economy to keep things alive.
This has resulted in the creation of a new or even a renewed narrative. Some people think that printing more money could dilute the value of the US dollar until it is worthless.
Investors originally bought gold, but Bitcoin has adopted gold as the world’s new hard currency. That’s how some people see it. Many investors have joined this idea. It’s not just the investors, but the big banks too.
What do you think of Tesla and other companies that accept Bitcoin and other cryptocurrencies? Does this check the cryptocurrency?
In theory, yes. They have big payment providers like PayPal that you can use to buy Bitcoin and use it to buy things. In reality, all it does is convert your bitcoin into dollars. So there are transaction fees.
Once this infrastructure is in place, Bitcoin and other cryptocurrencies have the potential to be a payment mechanism.
The main problem remains Bitcoin’s price volatility. You can see on the blockchain that all transactions are investments. Nobody pays for ordinary things. It became like gold.
Some of the best cryptocurrencies on the market and current price
- Bitcoin – $ 56,000
- Ethereum – $ 2,200
- Dodgecoin – 41 cents
- Cardano – $ 1.22
Source: Blockchain.com April 19th
Last question: will Bitcoin and cryptocurrency stay here?
Yes absolutely. The cryptocurrency business will be huge. It will spread its tentacles in any industry around the world.
Some say compare this to the early days of the internet. In this sense, cryptocurrency has the same potential.
The actual technology can help save huge amounts of money in many different industries.