In 2008, Satoshi Nakamoto invented Bitcoin, the first digital currency in the crypto world. The creation of Bitcoin set a stage for a financial revolution. According to a whitepaper published by Nakamoto in 2009, Bitcoin is a purely peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution.
Bitcoin has a total maximum supply of 21 million. It is generated through mining. Bitcoin miners process transactions and secure the network using mining hardware and in return, they collect new bitcoins. Currently, 18,632,050 of the total supply was already mined. This leaves the bitcoin miners with only 2,367,950 million left for mining. In a data by Crypto.co, the cryptocurrency has a total market cap of $960,203,973,472 with its current supply.
Today, we already have 4,000 existing cryptocurrencies and the number continues to grow. But undeniably, Bitcoin the original cryptocurrency remains the most dominant and most supported by investors worldwide. From retail investors to institutional investors, Bitcoin remains to be the favorite. We have seen the price of the cryptocurrency reach its peak in 2021. The recent bull runs and the price swings leave investors with mixed emotions every time.
But despite its popularity, Bitcoin is faced with massive criticism. Here are some reasons why.
- High Volatility
- Failed as a payment system
- Used for illicit-activity particular in the black market
- No chargeback or refunds
- High competition against other cryptos
- Scams and Frauds
- Negative effect of bitcoin mining on environment
The Bubble History
The price dips after a price surge has earned Bitcoin its reputation as a bubble. It all started on February 14, 2011, when the BTC (bitcoin) price surged to $1.06 then dropped to $0.67 on April 5, 2011. It was followed on June 9, 2011, when its price jumped to $29.58 after the news was circulated by Gawker about dark-web market Silk Road. In reports, it was stated that illegal drugs can be purchased from the website. At that time, there was a wide belief that bitcoin is untraceable which turns out to be false of course. But apparently, the price didn’t hold out for too long. On Nov. 18, 2011, the BTC (bitcoin) price took a sharp dive to $2.14. But after 3 years, the price of cryptocurrency breached the $1,000 mark on Nov. 29, 2013. Sadly, the price slump to $172.15 on Jan. 13, 2015. But again another surprising event happened. Two years after on Dec. 15, 2017, the BTC (bitcoin) price unexpectedly skyrocketed to $19,665. The entire crypto community was in euphoria. Who would expect that BTC (bitcoin) from its price of merely $0.0008 will reach $19K plus? Unfortunately, the celebration was replaced with anguish and despair when the price fell off to $3,164 on Dec. 15, 2018. The succeeding years were not too favorable for bitcoin and the rest of the cryptocurrencies in the market. Will bitcoin finally burst and disappear like a “bubble”?
Bitcoin: A Bubble? A Bubble Not?
In 2019, the BTC (bitcoin) price has slowly recovered after recording an all-time high above 8,900 but still 120% below its recorded all-time high in 2017. There were speculations that it will soon regain its lost glory, but how? Alas, before the end of 2020, the BTC (bitcoin) price even surpassed its 2017 all-time high. On Dec. 27, 2020, the digital currency surpassed the $28K mark and recorded its newest all-time high. According to experts, the price rally was a result of the massive adoption of institutional investors like Microstrategy, Galaxy Digital Holdings, Wall Street, and Paypal.
But does the entry of institutional investors guarantee a sustainable price for BTC (Bitcoin)? Unlike retail investors, they view bitcoin as a hedge against inflation and currency devaluation. This means they intend to hold bitcoin in the long-term which is contrary to retail investors who sell at any opportunity to gain profit.
The latest to join the bitcoin community was none other than Elon Musk, the richest man in the world and the most influential personality in the entire crypto industry. On Feb. 8, he purchased 1.5B worth of BTC (bitcoin) through his company, Tesla. The announcement of his purchase has sent the crypto market into a frenzy. BTC (bitcoin) price immediately surged to $46K.
The price of BTC (bitcoin) continues to rise every day. It has been constantly in a price rally breaching unknown territories. On Feb. 15, the virtual asset recorded another all-time high at $49,031 in data by Crypto.co.
On Wednesday, BTC (bitcoin) recorded its newest all-time high at $52,622 in data by Crypto.co. Arguably, bitcoin, a bubble once but a bubble no more. Bitcoin is now a store of value as even admitted by Crypto’s Fiercest Critic, Nouriel Roubini.