The crypto market remains unstable. But last year or so, the prices of most major cryptocurrencies like Bitcoin (Cryptography: BTC) It has skyrocketed. This has attracted unprecedented attention from investors and the wider world. But despite the massive price hikes, many investors remain on the sidelines due to concerns about crypto fraud and fraud schemes. These fears are unfounded. According to a new study from The Motley Fool, “Investment fraud costs millions of people and cryptocurrency is the best way to pay.”
The threat of fraud is to keep many investors out of crypto, but I still have a great belief in cryptocurrency. There are two main reasons why I continue to invest.
There are old proverbs in the financial world. Currency is a bubble that never pops. Well, never. Throughout history, some currencies have collapsed due to hyperinflation or government collapse. However, in general, when they are used, currencies have stood the test of time. Most global currencies today are considered Fiat currency. That means they are nothing but a social understanding that they are worth something. For example, US dollars have no direct value as gold or silver. It cannot be exchanged to the Federal Reserve for a particular product or specific benefit. The US dollar holds its value. Because we all agree that it is worth it.
Gold is very similar. Part of its value comes from industrial use cases. However, the majority of gold’s value stems from its status as a social benefit. Therefore, the value of gold fluctuates greatly based on its perceived valuation. In this respect, Bitcoin is the same. No one controls the value of Bitcoin. Instead, its value is traded freely at that value, reflecting its global perception of its value. Like the US dollar, you cannot exchange Bitcoin for concrete profits, but that doesn’t mean they are worthless.
Gold is often considered a valuable storage. This means that Fiat currency can be insulated from currency inflation and general global events. Bitcoin also has a valued store and many people, despite the fact that prices on Fiat currency terms for a particular day or year could fluctuate wildly and may reduce the debate somewhat. It is considered. Nevertheless, using Bitcoin allows you to diversify your risk from traditional Fiat currencies like the US dollar.
What gives US dollars and gold social value? There are many factors, but one of the biggest factors was that they were reliable symbols of social values. They have a long history of social value, so they retain that value at least for the time being. Bitcoin is the early stages of its historic journey, but its place in the “value store” conversations cement each year.
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