Bitcoin has been growing and becoming more widely accepted in the recent years. The digital currency has reached several highs since its launch, and with every high, it has attracted more people. Increasing awareness of crypto currencies has led to more interest and investment, so it is no surprise that experts in this industry are very optimistic about Bitcoin’s future, even in a bearish market.
Bitcoin Reached Peak in 2017
2017 was a great year for Bitcoin because the value hit a peak no one had suspected it would. This immediately caught the attention of prospective investors, institutions, government bodies, and the general public. Articles flooded new media and suddenly there was a tremendous surge in interest.
At the peak of this phase, some financial experts discussed the possibility of the “Bitcoin bubble” and the chances of the value dropping drastically. But if there’s a bubble, it is nowhere near close to bursting. The increased interest didn’t just invite more investors but also created an environment that encouraged Bitcoin’s stability. This has a direct impact on the crypto currency’s future value and growth.
Awareness Regarding Bitcoin
A recent survey conducted by ING revealed a lot of interesting facts regarding the present and future interest in Bitcoin. Let’s a have a brief look at the information generated by the survey before discussing its impact:
- 9% of Europeans, 8% of Americans, and 7% of Australians already own some Bitcoin.
- 90% Australians, 66% Europeans, and 57% Americans have heard of crypto currency and are somewhat aware of its function.
- 25% Europeans, 21% Americans, and 15% Australians expect to own some form of crypto currency in the future.
While all three of these facts are interesting, the last one is of particular note. According to this survey, a large percentage of the population in Europe, America, and Australia fully expects to own Bitcoins or similar currencies in the future. This survey was conducted over a large sample size of 14,828 people, which gives researchers a good impression of what the rest of the population expects.
Half of the Remaining Bitcoin is Spoken For
The survey mentioned above indicates that a little over 14% of the population in all of these areas, which amounts to around 691,782,000 people, expect to hold Bitcoin in the future. That’s around 99 million future investors. If these individuals intend to own even £100 worth of Bitcoin in the future, they will claim 1.9 million Bitcoin (based on the price of $6500).
Bitcoin has a limited supply currencies, which means half of the supply remaining to be mined already has prospective buyers. This indicates that while the market value of Bitcoin is falling right now, the interest hasn’t disappeared and it will take something pretty drastic for people to dismiss the value of the digital currency in a decentralised system.
Doesn’t The Drop in Value Affect Future Demand?
Bitcoin has dropped in value by nearly 52% YTD and nearly 68% since the record high the currency reached at the end of 2017. This might make a prospective investor wary, but the fact is that the value proposition of this asset hasn’t changed much. In fact, one would argue that Bitcoin’s potential has only flourished since the record highs and will continue to do so in the future. There are many reasons why this asset will continue to flourish, such as:
- Market maturation and more stable investors.
- Clarity and maturity in regulation from national governments.
- Development geared towards safe and steady scaling of crypto currency like the Lightning Network.
- Increased consumer awareness and more widespread availability of reliable information regarding crypto currencies.
All of these factors have created a more stable environment, which increases consumer confidence even in a bearish market. That’s why the drop in value hasn’t affected future demand.
Investors Invest in Growth Stories
Most new markets undergo sudden and big drops in value as that’s just the nature of the market cycle. If there’s no stable platform or system to sustain them, these assets crumble under the pressure. This is mostly because investors don’t believe they will have a good growth story to recover from the drop in value. Investors don’t believe the supportive structures in place will be able to hold the asset up in a changing market.
However, if investors believe in the underlying system and see potential there, they will invest in the growth story. They essentially invest in an asset that they believe will recover from a massive drop in value steadily and come back stronger than before. This is what more and more investors believe for Bitcoin.
Many large companies took a big hit during the market crisis after the boom in 2000. Valuations reached record lows after record highs. Companies like Amazon recovered and soared higher but it took them multiple years. Experts believe they’ll see a similar trend with crypto currency.
Retail Interest Drives Growth
An increasing number of financial institutions are now taking interest in Bitcoin. Well-established companies like Goldman Sachs, JP Morgan, Deutsche Bank, Merrill Lynch, Barclays, etc., are taking interest in Bitcoin and the crypto currency realm. Financial institutions are now creating platforms that provide easier access to Bitcoin, which draws more investors. There is more support to encourage real transactions through Bitcoin so people can buy goods using crypto currency.
Platforms like Bakkt help people spend their digital currency instead of just hoarding or trading them, which adds to the liquidity of these coins. While most experts are focusing on growth caused by institutions, it’s important to acknowledge the power of retail demand. That has always been the driving factor leading to Bitcoin’s growth.
Better infrastructure, more talent, more awareness, and easier access ensure interest in Bitcoin will continue to grow. That’s why the fall in current value doesn’t really affect future demand.
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