Amidst a time of such uncertainty, one thing is certain – the price of the popular cryptocurrency, Bitcoin, is showing no signs of slowing down. What seemed to be a dead fad has now surpassed all-time highs that were set in 2018. Why is this happening and what does this mean for your future?

The reason for such a rise in the price can be attributed to many factors. The primary one is that no one person or government can control Bitcoin. If the economy were to collapse in a certain country, the value of the cryptocurrency would decline unlike a country’s physical currency, such as the American dollar. 

In a time of such an economic downturn all around the world from things like COVID-19,

That is why people have been buying it in the uptick that they have been. People have also been buying it as a prediction that the economy will fail similarly to shorting a stock.

Companies have observed this trend and have no problem getting involved with what could possibly be the future of money especially after the price of Bitcoin is now over $20,000 for the first time since 2018.

“With Bitcoin, it is a new and innovative product that protects storage of data, so I could see some ‘hotness’ there.  Bitcoin very much appears to run on “buzz,” says Frank Manziano who teaches economics and investing at Glen Rock High School.  

An example of a popular company getting involved is PayPal which is at the forefront of online money exchange. PayPal introduced the option to buy Bitcoin to its 346 million users late this year.

The rise of Bitcoin affects everyone in a major way. We could be seeing the end of traditional currency as we know it. Bitcoin eliminates the need for middlemen in financial transactions. One of the primary features of Bitcoin is that it doesn’t require an intermediary as traditional currency does. Rather than a bank or other central institution validating transactions, all users of the currency verify it in a decentralized fashion. Cryptocurrency could very soon become the new normal if the economy stays unstable but many people say otherwise.

“If demand continues to grow for this product as a source of privacy, in any increasing chaotic world, perhaps bitcoin has a role.  I view it sort of like a commodity like gold or silver… little intrinsic value in and of itself, but prices can completely change as a result of perception, emotion, and perhaps fear of increased privacy issues…  so tread carefully if at all!” says Manziano.

Overall, Manziano believes that Bitcoin won’t have enough of an impact for a replacement currency because of the constant jumps. That’s also why he thinks that people shouldn’t want it as a replacement currency, to begin with.

There are still many other downsides to using Bitcoin that cannot be looked over. There are a lot of things that can go wrong because Bitcoin is not regulated by anything or anyone. Bitcoin has been known for its scams and fraud since all Bitcoin transactions are not refundable. The cryptocurrency is also susceptible to high price volatility which caused its downfall in 2018.

Nevertheless, the cryptocurrency market definitely has no room to be overlooked and Bitcoin is a great example of this. It is no doubt that Bitcoin or another type of cryptocurrency could be the future but for now, we will have to see.