Cryptocurrency and the famous one- Bitcoin

Blockchain is the latest technology which has come in Vogue and is there since 2009. It is the base and founding block of Cryptocurrency and the famous one – Bitcoin.

It is a shared e-ledger, which keeps a track of transactions that takes place on it and cannot be altered.

This facilitates the exchange between two entities swiftly, as the records become eternal and cannot be tampered with.

If there is a blockchain network, it can be accessed only by its members and all the details are shared and available, thus making it transparent.

It got its due in Jan’09, when Bitcoin was launched using it and the world saw its application and benefits.

Bitcoin, also called a cryptocurrency, has gained a lot of popularity since then and has moved from almost no value to a high of $60,500 in April’21, per bitcoin.

Please find the movement in price of Bitcoin in all these years below:

There are currently close to 4500 cryptocurrencies in the world and their king is Bitcoin because of:

• Value – Market capitalization of Bitcoin has touched $1 trillion in 2021.

• Popularity – It is a topic of discussion for every investment entity, with its vertical rise in last 2 years. It has gone up by 15-20 times since 2019. No other asset class has given such returns, not even close to it

• No control and tracking – If someone has cash or anything of value, it is always a subject of scrutiny in terms of its income source. There is also a fear of theft and a number of controls. Also, if you want to move it from one country to another, there is a tedious process for the same. Bitcoin is a single answer to all these problems. All you need is a login ID and a key. Then, no one can track your holdings. It can also be transferred to any person in the world using an electronic device and doesn’t attract any fees, attention, etc.

Above are few of the benefits and reasons as to why Bitcoin has become so popular in such a short span of time.

If someone wants to trade in them, there are various options in India through which a trade can be taken.

Although, RBI in 2020 has come out several restrictions on trading in Bitcoin, still it doesn’t barred people from taking a position in it.

If you want to take a trade in it, please do it with following caution points:

• Bitcoin doesn’t have any fundamentals attached to it. Its trading at $60k because someone is buying it at that price. It has seen a correction of close to 70% in 2018 and it can see it again. If we try to understand the reasons of decline, it would be difficult. Similarly, it will be difficult to ascertain the reasons of its rise.

• We are still a long time away when Bitcoin can, if it ever happens, be used for buying goods and services, just like we can do it with a normal currency. Although, Tesla has started accepting it as a form of payment, we are still far far away from a reality, where in, it can be used internationally as an alternate currency.

Above is a synopsis of history of Bitcoin and its benefits and challenges.

Our stance on investment in it is very very cautious. If someone wants to trade in it, please do it at your own due risk as its difficult for us to attribute any fundamentals to it and a price target.