Digital currency investments continue to make headlines. Bitcoin or the first crypto token became an instant hit that’s why bitcoin is the king of cryptocurrencies. The token enables easy peer-to-peer transactions. However, the utility of this token grew multi-fold. It is backed by decentralised finance and blockchain technology in the investment model.
Growth of Bitcoin investments
Investors who grew keen on crypto tokens considered Bitcoin a lucrative investment option. Additionally, there were also many technical advances undertaken on this token. It allowed users to complete transactions in less than a day. Also, the transaction charges were much lesser as compared to traditional currency.
Many online gaming platforms and other multinationals came in support of this token. Microsoft made it possible to buy their Play station using Bitcoin. Tesla came forward with a change in its policy to enable automobile purchases using crypto.
Another advantage of Bitcoin is the control over its demand and supply. Unlike traditional currencies, cryptos have limited supply in the market. In the case of Bitcoin, it is estimated that the last Bitcoin will be mined in 2045. It simply means there is complete control over the supply of this token. It is another reason that has boosted the price of this token in the global market.
Price volatility of Bitcoin
Yes, like any other crypto Bitcoin has its price volatility. The token has exhibited strong changes in prices in the past few years. The token entered the market with a launch price of $1 per token. In five years, the price of this token rose to $28k per token. In 2021, the prices of this token touched an all-time high. Bitcoins were being traded for $65k per token. Yes, early investors in Bitcoin made more than 2000% profit through this investment.
The market capitalization of Bitcoin
The concept of market capitalization works a bit differently for crypto. Unlike other assets, we do not consider the total volume of investments. Crypto market capitalization is nothing but the price of a token multiplied by the number of tokens in supply. Hence, the total market capitalization of cryptos depends entirely on market performance.
In early 2022, the market capitalization of crypt investments stood at $3 trillion. But with the current changes and the market performing all-time low, the market cap has changed. More than $1 trillion in investments were wiped out of the market in the past two months.
Bitcoin takes more than 50% of the total market cap of crypto investments. As compared to other global assets, the market capitalization of Bitcoin is much higher.
Let us do a comparative study on the same.
Bitcoin market size as compared to other precious metals
Bitcoin is also known as digital gold. Gold as a precious metal has been in the investment market for decades now. The market volume of gold is at $11 trillion. It is five times higher compared to the Bitcoin market. But having said that, it is also important to note that Bitcoin can grow in the market space. The day is not very far when Bitcoin may touch $100k per token.
Bitcoin market vs. real estate and equities
Real estate is undoubtedly a booming industry. And both real estate and the stock market also attract higher investments. These types of investments are not risky as crypto tokens. There is a definite governance scheme and regulatory authority monitoring such transactions.
Should you consider investing in Bitcoin?
This is a common question in the minds of many investors today. The current market performance is depressing. The price of tokens has fallen from $28k to $19k per token. Also, the token is not showing any signs of recovery in the current market situation. But many investment experts think that the bear market is beneficial. The market goes through this recovery phase every often. Indeed, it is another way of hygiene that cryptos go through. The market condition will also help to create a balance between the demand and supply of crypto tokens.
Crypto investments need a thorough consideration before making your funding. Make sure that you study the Bitcoin tokens before making your investment. Do not invest your complete savings into Bitcoin. Make sure that you diversify your portfolio before making your investment.
