Bitcoin the Future, Really?

Bitcoin appears to be the future of currency, or at the very least an acknowledged store of value, with institutions adding it to their balance sheets and El Salvador officially declaring it legal cash. However, given the market’s high volatility, risk-averse investors are still hesitant to purchase Bitcoin, let alone any other cryptocurrency.

Bitcoin’s monetary policy is far more sound than any government’s since it is not governed by a central authority. Bitcoin is a “rules-based monetary system,” according to Ark Invest CEO Cathie Wood, because its monetary policy is determined by the code’s parameters. Investors are seeking for alternative investments to protect against inflation as governments print more money than ever before in the wake of the pandemic. Many people are using Bitcoin to do so, which will help cryptocurrency adoption in the long run.

Is Bitcoin a sound financial investment? It certainly can be if you do your homework and invest sensibly. Investors, on the other hand, may make Bitcoin a disastrous investment if they treat it like any other asset.

01. Bitcoin’s Future Outlook

Because Bitcoin is the largest cryptocurrency by market value, and the rest of the market tends to follow its patterns, it is a good predictor of the crypto market in general.
Bitcoin’s price has been on a roller coaster ride thus far in 2021, reaching a new all-time high of $68,000 in November. Following earlier highs of over $60,000 in April and October, as well as a summer decline to less than $30,000 in July, this current record high has been set. Because of this volatility, experts recommend that you limit your crypto investments to less than 5% of your overall portfolio at first.

But how far can Bitcoin rise? According to Kiana Danial, author of “Cryptocurrency Investing for Dummies,” Bitcoin’s origins may hold some insights.
Since 2011, Danial claims that Bitcoin’s price has experienced numerous massive rises followed by pullbacks. “I anticipate short-term volatility and long-term growth from Bitcoin.”
Others, on the other hand, are more optimistic about Bitcoin’s short-term growth.
The price of Bitcoin, according to Bill Noble, chief technical analyst at TokenMetrics, a cryptocurrency analytics platform, will continue to rise for the rest of the year. “I believe Bitcoin will go to $75,000 rather than $25,000,” he says.

02. Store of value and not currency

Different countries’ governments may or may not accept cryptocurrency as a form of payment. Several of them have already enacted prohibitions and limitations, restricting cryptocurrency trading.
The Indian government had planned to implement a blanket ban on cryptocurrency at the start of this year, and had even filed a bill to do so. It has recently changed its stance and believes the concept is outmoded, but it is still unwilling to accept cryptocurrency as actual money. Instead, it intends to designate cryptocurrencies as an asset class, equating it to real estate rather than money.

Every economy is based on the government’s ability to manage its currency. In reaction to external and internal forces, the government can decide how much of a currency should be issued. If cryptocurrencies take the place of the rupee or the dollar, that power is lost. Bitcoin, for example, has a limit of 21 million coins. This means that there are only 21 million Bitcoins in circulation and that no more may be created. Even if there is such a thing as a

need. Other legitimate problems exist as well. The whole point was to make financial transactions more decentralized, and this is what works against Bitcoin and cryptocurrency. Tax evasion, money laundering, and dealings in criminal activities could all be facilitated by these transactions.

03. Not Bitcoin. This will be the future of money

The latest craze only strengthens the case for a steady, centralized, state-controlled competitor. Then there’s digital money.
The wild gyrations of Bitcoin in 2021 have ensured one thing: the future of money will be electronic, but it will not resemble a cyberpunk utopia in the least. The power of the people will be subordinated to the might of the sovereigns.
The euphoria and fear that has engulfed decentralized cryptocurrencies is enhancing the appeal of its upcoming competitors: central bank-issued digital cash. These tokens will be secure, centralized, and government-backed.

controlled. That’s exactly what customers will want in an Internet of Things world where robots must constantly and instantly settle claims with one another while avoiding adding to global warming.
Official electronic coins will represent a new sort of central bank liabilities alongside physical cash, but they will not be a novel asset class for investors wagering on the future value of the dollar, yen, or euro.

04. Network of payments

The software keeps track of all Bitcoin transactions in a constantly updated ledger. The algorithm determines Bitcoin’s scarcity, and mining generates new Bitcoins at regular intervals. Solving the math problems required to confirm transactions is one way to earn Bitcoins. The generation of new currency is triggered by the successful solution of those challenges using mathematical calculations.

Limitations of 

Since its inception, a civil war has raged over Bitcoin’s future, and it is already showing signs of strain. The market capitalization of all cryptocurrencies declined from 85 percent to 41 percent as Bitcoin’s proportion of the total market fell from 85 percent to 41 percent. Its price has climbed rather than fallen, but several of its competitors have risen much faster. Furthermore, due to programming constraints, the Bitcoin network can only handle seven transactions per second. Given that the system professes to serve the public, this figure is insignificant. As

Customers have been at odds as the load grows, transactions take longer to confirm, and the burden grows. The squabbles are threatening to render Bitcoin obsolete or split the currency into two versions. Overall, while Bitcoin enables for the movement of wealth, it is slower and has a smaller capacity than some of its more recent competitors.

05.The Future of Crypto Is Bright, But Governments Must Help Manage the Risks

The Future of Money: How the Digital Revolution is Transforming Currencies and Finance is written by Eswar Prasad. He is also a senior fellow at the Brookings Institution and a professor at Cornell University.
Bitcoin appeared to be on the rise. El Salvador declared the Bitcoin legal tender in early September, allowing it to be used for transactions. In Afghanistan, there is speculation of Bitcoin becoming a medium of exchange, allowing financial transactions in a culture where traditional money is no longer issued. The

With the introduction of a Bitcoin exchange traded fund on the New York Stock Exchange this week, cryptocurrency has made its way into mainstream finance, allowing U.S. investors to bet on Bitcoin values without really holding it. Of course, early Bitcoin investors have made a killing.
In the midst of all of this excitement, banking officials in Washington have begun to express growing reservations about Bitcoin and other cryptocurrencies. Then, last month, China slammed the brakes, outlawing all cryptocurrencies.

What Will Happen to Bitcoin in the Next Decade?

The ecology will most likely increase as regulation adapts to keep up. The coming decade, according to Schwartz, will “bring an explosion of low-cost, high-speed payments that will transform value exchange the way the Internet did information sharing.”
Bitcoin’s price has risen to approximately $60,000 so far in 2021, before dipping to roughly $40,000. Large banks are still paying attention to bitcoin, with Goldman Sachs reinstating its crypto trading desk and BNY Mellon launching digital currency custody services.

Bitcoin, according to Citi, might become the preferred money for international trade. This comes after PayPal (PYPL) and Tesla (TSLA) both made bitcoin bets in early 2021. Tesla purchased $1.5 billion in Bitcoin, while PayPal made an offer to purchase Curv, a crypto custodian. Bitcoin’s future is still highly uncertain, according to Citi, but it is on the verge of general acceptance. Institutional investor interest is fueling widespread interest in cryptocurrencies, but concerns about custody, security, and capital efficiency remain, according to Citi.