The internet age has brought about change into every aspect of life and finance was not left out of the equation. Money, the bloodline of all modern day hustle, is also becoming a digitalized concept with millions of people playing around with numbers instead of banknotes over financial networks. Blockchain, or Bitcoin as it is better known, is the latest breakthrough in such a trend, as digital currencies have been skyrocketing in value recently to raise controversy, interest and suspicion at the same time. Information is key in this paradigm and visiting a cryptocurrency blog helps understand the dynamics of the digital revolution of money. Without insight into such dynamics, people have little control over their investments and might very well lose significant sums of money due to errors or shifts in the market.
The newly emergent Bitcoin trend has become so massively popular and widespread that in 2017, the value of a Bitcoin has surpassed the value of gold in the markets, with $1,290 per coin compared to $1,228 for an ounce of gold. The Bitcoin revolution has already infiltrated the corporate world with companies such as WordPress, Overstock.com, Reddit, Microsoft and Shopify accepting Bitcoin as a legitimate form of payment. With 21 million units in existence and 16.2 million in circulation, every ‘miner’ adds 12.5 coins into the market every ten minutes, creating a surge of expansion. Many see the technology as a viable source of investment as in 2017, the annual return on investment for Bitcoin was 155% and even more people are wondering when and if central banks will be issuing their own coins in the future. Banks such as Barclays, BBVA, Commonwealth Bank of Australia, Credit Suisse, JP Morgan, State Street, Royal Bank of Scotland and UBS have already initiated programs to promote Bitcoin investments while the Australian government has plans to reduce taxes on Bitcoin transactions. In the US, the government is preparing for the release of ‘Fedcoins’, official US Bitcoin currencies which will be exchanged for physical money in the future, showing the essence and power of digital currencies in today’s governance.
Naturally, being the most powerful and dominant economic authority in the world, the United States houses one of the most applicable and profitable markets for Bitcoins, raising attention to possibilities. The Securities and Exchange Commission has recently launched ‘FinHub’, an online portal for “engaging with companies using blockchain, artificial intelligence and more” and provide the SEC’s existing services at a single access point to promote communications between corporations and the public. One of the primary concerns regarding blockchain technology is the issue of disinformation against which the SEC hopes to create an informed public through such an investment as the platform will help investors file complaints against misbehaving companies or services. Scam websites are quite common in the digital currency business and the website intends to educate blockchain investors about possible risks. Among the website’s services is the ‘online meeting’ function that enables people to request appointments with companies or authorities for direct intervention. The SEC also is currently planning to hold its second ‘Fintech’ forum in 2019 to house representatives from the blockchain business and initiate discussion regarding some of the most dominant issues in the market today as well as promoting innovations in the field.
Such measures should be taken seriously as in September of this year, the Bitcoin prices have dropped by more than 20% within two days, creating a shockwave in the markets. Cryptocurrencies such as Etherum, Litecoin and Ripple were all subjected to significant losses in value while Goldman Sachs postponed its plans to enter the Bitcoin trading markets. Many speculate that the recent rise in Bitcoin value was due to the possibility of the banking giants entering the business as the markets readied themselves for a large-scale financial operation. However, the plans did not materialize and the value of Bitcoin dropped to $6,400 from $20,000 in December of 2017 with high possibility of the price dropping further down to below $5,000. The volatility of the market is deterring serious investors from taking action while internet giants such as Google, Facebook and Twitter are directly blocking cryptocurrency advertisements to avoid legal complications. The Securities and Exchange Commission has so far blocked several intentions for Bitcoin trading investments including those of Proshares, Direxion and Winklevoss. As the general sentiment in the markets is turning away from fascination to suspicion, many are wondering if Bitcoin was yet another bubble or not, making it harder for investors or authorities to foresee the currency’s future place and position within the markets.