It's just a matter of time before the price of Bitcoin starts to soar
Over the last couple of months, the price of Bitcoin has struggled somewhat.
Some analysts put this down to the number of people mining the digital currency and selling it on straight away.
Adding to this flood of Bitcoin to the market are merchants. Instead of holding onto Bitcoin, they're turning them into real cash.
These two factors are putting downward pressure on the price, but it doesn't look like it's going to last for long.
Let's take a closer look at why the price of Bitcoin is going to rise…
Merchants will start to hold onto Bitcoin
The problem with merchants converting their Bitcoin into cash
is one of the side effects of Bitcoin still being in its infancy.
As time passes and people become more comfortable with Bitcoin, merchants will start to hold onto some of the digital currency.
Along with that, more consumers will start using Bitcoin, David Zeiler in Money Morning US explains. This will increase the demand for Bitcoin and in turn its price.
The true value of Bitcoin
The success of Bitcoin is down to the blockchain. The blockchain is the underlying infrastructure that verifies each Bitcoin transaction.
And it’s not just this verification process that’s advantageous…
The blockchain has other non-financial uses. Extra data can be embedded into transactions.
This could be used for:
Decentralised stock markets where shares could trade from peer to peer.
Proof of authorship.
It’s this potential of Bitcoin that’s helping attract so much money from venture capitalists into it. So far this year, investment tops $171 million!
When will the price of Bitcoin rise?
You have to bear in mind that Bitcoin is still in its infancy. Once Bitcoin becomes more mainstream, the rise in demand will send its price up.
Of course, no-one knows for certain how high the price of Bitcoin will go. Estimates ranges from $2,000 within the next 12 months to $1 million in ten years’ time.
If you believe in the future potential of Bitcoin, now might be a good time to buy some.
So there you have it, why it’s just a matter of time before the price of Bitcoin starts to soar.
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