In the recent past, the bitcoin price has fluctuated extremely. The reasons for this are multi-layered. Where is the cryptocurrency’s path likely to lead?
In 2010, the first exchange rates for the new digital currency were determined: The value of one Bitcoin was given as 0.0008 US dollars in 2010. So for one dollar you could have bought more than 1,000 Bitcoin. At its peak, one bitcoin was traded at 52,648 euros in the fall of 2021. On February 01, 2022, the value was 34,377 euros. The bitcoin’s fluctuation range was extreme in 2021: after reaching about 12 thousand euros at the turn of 2020/2021, the value rose unabated to almost 50 thousand euros in April and then fell again to 28 thousand euros in July. The peak was reached in October/November and fell to below 34 thousand euros at the turn of the year.
At the end of 2021, there were just under 19 million euros in circulation in the Bitcoin system. Market capitalization was thus around 650 billion euros. The 24-hour trading volume on Feb. 14, 2022, was 16.3 billion euros. Bitcoin is thus the most traded cryptocurrency and has a share of just over 40% of the entire crypto market.
The official currency abbreviation is BTC. Technically, Bitcoin generation is limited to a total of 21 million Bitcoins. Bitcoins are stored and transferred via a decentralized booking system, the blockchain. Proofs of ownership are stored in so-called wallets. Transactions are processed using cryptographic technology in the blockchain between the sender and the recipient. This ensures that the transfer of a BTC unit can only be made exactly once and not more than once.
New Bitcoins can be created via “mining,” in which computers perform highly complex cryptographic tasks. However, much of the maximum amount of Bitcoin has already been created.
Since the value of Bitcoin is not backed by a central bank or deposited assets such as the gold standard, but is merely determined virtually via trading on the stock exchange, Bitcoin is not suitable for traditional financial investment, such as pension protection. There are specialized advisors who advise the addition of Bitcoin to an investment. However, such an investment is highly speculative and considered risky.
To what extent digital currencies issued by central banks will offer an alternative in the future for all those who want to make digital payments quickly and without banking infrastructure remains to be seen. And how other cryptocurrencies will develop is also impossible to estimate at the moment. Own cryptocurrencies of social networks such as facebook are currently slowed down or completely prevented by strict requirements of the responsible central banks and legislators. So here, too, the future is open.
It remains to be judged that the Bitcoin’s performance is highly fluctuative – both upwards and downwards. Those who see opportunities in Bitcoin must not ignore the risks behind it. A long-term assessment is currently completely impossible.
