Traditionally, gold has been performing exceptionally well in times of economic uncertainties globally.
This year was no exception as both bitcoin & gold have seen a tremendous increase in value since march due to the introduction of lockdown among several countries to help curb & mitigate the spread of Covid-19.
In the previous five months, the price of bitcoins has seen a significant increase despite wiping more than $4000 during the same period, which is by far doing better than crude oil, silver & gold.
“From a wider perspective, the huge growth in central bank easing and government debt does highlight why many feel the need to store their wealth in alternative assets to avoid the apparent depreciation that could be on the cards.” Joshua Mahoney, the Senior marketing analyst at IG, told The Independent.
This sudden surge of bitcoin prices has enabled it to become the best-performing asset of the year 2020, overtaking gold as some analysts believe that by the year 2029, it will have surpassed the market as well.
As of this writing, the current market cap of bitcoin stands at $117.81 billion, which is roughly 40% less than that of gold that stands at a market cap of $9 trillion.
This, of course, is debatable among crypto enthusiasts. Still, an exciting oversight seeing a store-of-value asset created just nine years ago achieving and increasing in value tremendously over a short period.
Is This the Best Time to Invest?
Blockchain-based digital currencies have been around for longer than ten years, since the arrival of Bitcoin in mid-2009.
While the asset has impressively increased in value, it remains moderately little and exceptionally unpredictable, and therefore, concluding whether to invest in Bitcoin or other digital currencies can be a disputable and confusing choice.
Well, we are here to guide you into making wise decisions when it comes to crypto investment, and yes, this is the right time to invest.
Regardless of whether we proclaim that these commodities are helpful, and regardless of whether we recognize that the units of any digital currency are scarce by structure, anybody would now be able to make new digital currency. Since Satoshi made sense of the scientific and programming techniques to make computerized scarcity (To some extent, based on other’s past work) and made that information open, and subsequently tackled the difficult issues related to it, any software engineer would now be able to assemble another cryptocurrency.
There are several cryptocurrencies since the conduit of information has been opened, and some of them are optimized for speed while others are optimized for proficiency.
Along these lines, instead of only one commodity that has the unique property of having the option to be transported over a system, there are a large number of similar products that have that new property. This dangers the shortage part of the product, and along these lines, chances of its incentive by conceivably weakening it and separating the network among numerous conventions.
Every digital currency is scarce. However, there is no shortage of the number of cryptographic forms of money that can exist.
This is not normal for silver and gold, which are just a bunch of essential valuable metals, they each include a shortage inside the metal (200,000 tons of assessed mined gold, for instance), and there is a shortage of what number of essential valuable metals exist.
For the most part, these metals are one of a kind as nature has limited their production.
There is a proportion called “Bitcoin predominance” that showcases the percentage of bitcoins market capitalization and estimates capitalization that Bitcoin has.
Therefore, when Bitcoin was made, it was the main digital currency and consequently had a 100% piece of the overall industry. Following the ascent of Bitcoin, presently, there is a considerable number of various cryptographic forms of money.
Before the end of 2017, during that top excitement period for cryptographic forms of money, Bitcoin’s piece of the overall industry quickly fell underneath 40% but has since transcended 60% piece of the pie. Out of thousands of cryptocurrencies, Bitcoin has a 66% market share, which makes it a good investment.
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