“Bitcoin is really a fascinating example of how human begins create value…so long as people believe they can sell it to someone else…that’s all you need to create a market.” ~ Former chairman of the Federal Reserve Alan Greenspan
The price of bitcoin surged Thursday, rising past $17,000 per coin in a 100 percent increase in just two weeks and a 1,200 percent increase this year alone.
As the cryptocurrency has become more mainstream, critics warn that it’s a bubble waiting to burst while digital currency enthusiasts say it’s the future and you should buy in now. [Bitcoin can even be purchased on Craigslist]
Bitcoin was first created in 2009 by a person, or entity, using the alias Satoshi Nakamoto. Each bitcoin is created by having computers run a specific algorithm over and over again until it finds a special number. Only 21 million bitcoins can exist in total, and 80 percent have already been found. However, it’s expected to take over a century to mine the remaining 20 percent.
WHY’S IT GOING UP?
As Bitcoin rises and enriches investors, more people are jumping in. Wall Street is joining the game as well, which could possibly pour billions of dollars into the currency.
Crypto markets are notoriously volatile, and the lack of regulation has created some “wild west” problems. You shouldn’t center a retirement strategy around it, but cryptocurrency likely has a strong future. Still, investors need to be able to weather big swings in both directions.
Bitcoin has value for the same reasons that a dollar (or any other currency) has value: it creates an exchange process for buying goods and services, even though right now people are mainly buying it to hold onto. Investment advice? If you really want to jump into the market, the best time is after a crash.