A cryptocurrency is a digital currency that exists without the guidance of central banks. It is located in the world of blockchain technology, and bitcoins can be obtained by mining, receiving remuneration for the work done.
Bitcoins are a decentralized cryptocurrency that lives its life. It should be noted that bitcoins can also be purchased for money, so cryptocurrencies have become a popular investment target for many.
Is buying cryptocurrency an excellent and safe way to invest? If so, is this the best time to do so, 2020? So far, you can’t complain about boredom. The year has been eventful and surprisingly saturated. Many would say it is even too saturated. Investment and stock markets, gold and oil stock price indices have swayed like a wooden boat in the ocean during a storm, thanks to the virus’s crisis. The value of Bitcoin has reached even 10 thousand euros, then dropped to 3,500, but now has stabilized at 8,500. The exchange rate fluctuations have been the largest since 2017 when at one point, the value of the Bitcoin was 18,000 euros.
The recent increase in Bitcoin value is due to the actions of the US Federal Reserve aimed at reducing the destructive effects of the virus on the economy. The number of dollars in circulation increased significantly. Many were looking to invest as much as possible in cryptocurrency to reduce the risk of losing their savings as money became less valuable. It is widely believed that Bitcoins’ value will not decrease due to their limited number, and the number of Bitcoins obtained during excavation is decreasing. A fall in supply and an increase in demand would logically increase the cryptocurrency value, guided by the basic postulates of the classical economy.
The first big wave of popularity of cryptocurrencies was observed during the economic crisis of 2008, when the vast majority of traditional stock shares and other values fell sharply in price. Even with the first alarming reports of the spread of the Covid-19 virus, the number of transactions on cryptocurrencies rose.
Increased activity was observed in cryptocurrency trading platforms. It seems that central banks’ actions, by increasing the amount of money in circulation, contributed to the outflow of investors’ funds in the cryptocurrency market.
The halving of bitcoin block wages in May this year also contributed to the decline in supply and stimulated interest in cryptocurrencies.
In the studies of human development, it is conventional to be guided by the teachings of history. In that case, it must be taken into account that after the first reduction of wages, which took place in 2012, the value of Bitcoin increased by 8000%. The further decrease in remuneration resulted in a 2000% increase in the value of the Bitcoin over the next 18 months. Based on these events, Mickael Mosse predicts that Bitcoin’s value will only increase shortly. At a time when the virus is quarantining many regions and countries in the world, the value of many businesses is declining catastrophically. It is also clear that many business structures will not recover from the virus’s effects at all.
You may ask if cryptocurrency is a safe investment field this year? This is, of course, a volatile market, but the opportunity should likely be taken to invest successfully.