The recent news about Bitcoin crossing the high of the last three years refers to the fact that on April 13th, 2021, Bitcoin’s value surpassed its previous high of around $20,000 in 2017 and reached a new milestone of over $64,000. This means that the value of Bitcoin has increased by over three times its previous high in just a few years. This is a significant milestone for Bitcoin and the cryptocurrency market as a whole, as it signals growing interest and adoption of digital currencies. The news has been widely reported in financial and cryptocurrency news outlets, and has generated a lot of buzz and excitement among Bitcoin enthusiasts and investors.
Brief history of Bitcoin and its previous high in 2017
Bitcoin is a decentralized digital currency that was created in 2009 by an unknown person or group using the pseudonym Satoshi Nakamoto. The currency is based on a technology called blockchain, which allows for secure and transparent transactions without the need for intermediaries like banks or financial institutions.
Bitcoin gained widespread attention and popularity in 2017, when its value skyrocketed from around $1,000 at the beginning of the year to nearly $20,000 in December of the same year. This surge in value was driven by a combination of factors, including growing mainstream acceptance and adoption of Bitcoin, increased demand from investors looking for alternative investment opportunities, and speculation.
However, the high of 2017 was short-lived, and in the following year, Bitcoin’s value dropped sharply to around $3,000, causing many investors to lose money. This drop was caused by a combination of factors, including increased regulation and scrutiny from governments and financial institutions, as well as a general market correction after the rapid surge in value in 2017.
Since then, Bitcoin’s value has been on a steady upward trend, reaching new highs and surpassing its previous records. In 2021, Bitcoin crossed the high of the last three years, reaching over $64,000 and demonstrating the continued potential of cryptocurrencies as a long-term investment opportunity.
The crash of Bitcoin’s value in 2018
In 2018, Bitcoin experienced a significant crash in value, dropping from its all-time high of nearly $20,000 in December 2017 to below $3,000 by December 2018. This crash was a result of a number of factors, including increased regulatory scrutiny, a lack of institutional adoption, and a general market correction.
One of the main reasons for the crash was increased regulatory scrutiny and uncertainty around the world. Governments and financial institutions became increasingly concerned about the potential for Bitcoin and other cryptocurrencies to be used for illegal activities such as money laundering and terrorism financing. As a result, many countries introduced new regulations and restrictions on the use of cryptocurrencies, which led to a decline in demand and a decrease in value.
Another factor that contributed to the crash was a lack of institutional adoption of cryptocurrencies. Many large financial institutions and companies were still skeptical of the viability of cryptocurrencies as a legitimate investment opportunity, which limited the amount of investment and capital flowing into the market.
Finally, the crash was also due to a general market correction, as the rapid rise in value of Bitcoin and other cryptocurrencies in 2017 was not sustainable in the long term. As a result, many investors who had bought into the hype and speculation in 2017 began to sell their holdings, causing the market to correct and prices to drop.
Despite the crash in 2018, Bitcoin has since recovered and is now at new highs. However, the crash serves as a reminder of the volatility and risks associated with investing in cryptocurrencies, and the importance of caution and due diligence when considering investing in this market
Factors contributing to Bitcoin’s recent success
Over the years, Bitcoin has gained increasing acceptance as a legitimate payment option by several mainstream companies and institutions. Some notable examples include:
- Tesla – In February 2021, Tesla announced that it had purchased $1.5 billion worth of Bitcoin and would soon start accepting it as payment for its electric cars.
- PayPal – In late 2020, PayPal announced that it would allow its customers to buy, hold, and sell Bitcoin and other cryptocurrencies, and would soon start accepting them as payment at its millions of merchants worldwide.
- Microsoft – Microsoft has been accepting Bitcoin as payment for its products and services since 2014.
- AT&T – In 2019, AT&T became the first major US mobile carrier to accept Bitcoin as payment for its services.
- Overstock – Online retailer Overstock has been accepting Bitcoin as payment for its products since 2014.
- Starbucks – Although Starbucks doesn’t directly accept Bitcoin, it has partnered with Bakkt, a digital asset platform, to allow its customers to convert Bitcoin into US dollars to use at its stores.
These examples demonstrate the growing acceptance and adoption of Bitcoin as a legitimate payment option by mainstream companies and institutions. As more companies accept Bitcoin, it further legitimizes the cryptocurrency and may encourage more people to use it as a payment option. However, it’s important to note that Bitcoin’s volatility and regulatory uncertainties may still make it a risky payment option for some companies, and it’s important to consider the potential risks and benefits before accepting it as payment.
Potential benefits and risks of investing in Bitcoin
Investing in Bitcoin has both potential benefits and risks, which investors should carefully consider before deciding to invest.
Potential benefits of investing in Bitcoin include:
- High potential for returns: Bitcoin has experienced significant price appreciation in the past, which has led to high returns for some investors.
- Decentralization: Bitcoin operates on a decentralized network, which means that it is not subject to the control of any central authority, such as a government or central bank.
- Transparency: Bitcoin transactions are recorded on a public ledger, which makes them transparent and verifiable.
- Liquidity: Bitcoin is a relatively liquid asset, which means that it can be easily bought and sold on cryptocurrency exchanges.
However, investing in Bitcoin also carries a number of risks, including:
- Volatility: Bitcoin is a highly volatile asset, with its price subject to rapid and significant fluctuations. This makes it a risky investment option for some investors.
- Regulatory risks: Bitcoin is a relatively new asset class and is subject to a high degree of regulatory uncertainty. Changes in regulation could have a significant impact on its price and usability.
- Security risks: Bitcoin is a digital asset and is therefore subject to the risk of hacking and theft. Investors must take steps to protect their Bitcoin holdings from theft and loss.
- Lack of intrinsic value: Unlike traditional assets, such as stocks or commodities, Bitcoin has no intrinsic value, which means that its price is largely driven by market sentiment and speculation.
Investing in Bitcoin can offer high potential returns and other benefits, but it also carries significant risks that investors must carefully consider. As with any investment, it’s important to do your own research and seek professional advice before investing in Bitcoin.
In conclusion, Bitcoin’s recent high of the last three years is an exciting development for the cryptocurrency market. With growing acceptance and adoption, increasing demand, and a shift towards digital transactions, Bitcoin has the potential to become a mainstream investment opportunity in the future. However, investors should always exercise caution and do their due diligence before investing in cryptocurrencies.
