BITCOIN THE FUTURE OF FINANCE
Bitcoin, the world’s leading cryptocurrency, has seen an exponential rise in value since its launch back in 2009. Its performance this year has been particularly impressive, with a dramatic price spike that could mean the alternative currency has finally come of age.
As shown on the UFX.com platform, the value of Bitcoin has jumped to over $4,300, up more than 300% since the start of the year, when it was worth just $997. Many analysts and traders are now wondering whether the cryptocurrency will climb even higher.
Bitcoin volatility can present risks, making it difficult to determine whether prices will continue to rise or if the bubble will burst. Some are even comparing the Bitcoin phenomenon to the Tulip Mania in the Dutch Golden Age of the 17th century. However, it is precisely this volatility which enables traders to benefit from large price movements and generate significant profits.
Traders can reap the rewards of investing in cryptocurrencies like Bitcoin by working with a leading cryptocurrency broker like UFX.
Many market participants expect Bitcoin to continue growing in popularity, which could push its price towards the $5,000 level this year. Institutional traders are also showing more interest in the cryptocurrency and are investing large sums in the digital asset to diversify their portfolios.
August 1st was a significant day for Bitcoin traders and owners, which led to major price volatility. A new cryptocurrency called Bitcoin Cash, established as a result of a “user-activated hard fork”, essentially split the Bitcoin community down the middle.
Blockchain and Bitcoin
Advocates of the new option have long demanded changes to Bitcoin’s underlying blockchain technology, which currently allows only 3 transactions per second, slowing some payments down by several hours. Experts are optimistic about the SegWit protocol behind Bitcoin Cash, which will significantly improve both the speed and scalability of Bitcoin. Investors hope this will stabilise its notoriously volatile prices, making it more appealing to the masses.
Bitcoin values have been skyrocketing since the beginning of August, reaching new highs almost every day this month, encouraging traders to bet on a continuation of the trend.
Nevertheless, a few analysts are predicting an impending crash. Analysts at Goldman Sachs have predicted that Bitcoin is likely to reach the $5,000 mark, but then will head back down towards the $3,000 level. In a note to their clients, technical analyst Sheba Jafari from Goldman Sachs said that “once a full five-wave sequence is in place, the market should in theory enter a corrective phase…This can last at least one-third of the time it took to complete the preceding advance and retrace at least 38.2% of the entire move”.
Traders need not panic if such a scenario occurs, as Bitcoin will still have recorded a year-to-date increase of more than 100%.