Technological innovations are now almost the order of the day, with digitalisation not afraid to take on even our means of payment. According to CoinMarketCap, an incredible 6,510 cryptocurrencies with a market capitalisation of EURbn 309 are in use around the globe at the moment. By far the most popular cyber currency is bitcoin (BTC), developed by Satoshi Nakamoto in 2008. The most important digital coin accounts for no less than EURbn 183, equivalent to a 59% share of the total volume of cryptocurrencies. That success is not a matter of course, though, is clear from a look at the exotic means of payment that have already been "buried" again. According to figures on the website Coinopsy, there are now 1,648 so-called "dead crypto coins", i.e. digital currencies that have since disappeared from the market.
Given the great dominance of bitcoin and its daily trading volume of more than EURbn 20, it is hardly surprising that in many places this particular cryptocurrency is traded as the payment means of the future. When it comes to security, too, bitcoin leaves nothing to be desired. Blockchain technology, in which every transaction is unalterably consolidated in a data block and cryptographically linked, makes the cyber currency safe from manipulation. As a consequence, it is finding increasing acceptance among the population. Since the start of the year, for instance, anyone living at the foot of the Matterhorn in Zermatt, in the canton of Wallis, has been able to settle their local taxes and municipal fees using bitcoin.
View more information on investment solutions on the topic “Bitcoin – the most important cyber currency in the world”.
How many bitcoins have to be used for a transaction depends on the exchange rate. Like any other currency, the digital coin is also subject to fluctuation –and this can certainly be enormous. It's worth taking a look at the past: whereas the digital currency had cracked the USD 20,000 barrier at the end of 2017, just one year later investors were only having to pay around USD 3,000 for a BTC. Recently, though, the curve has been pointing consistently upwards. At the beginning of August, bitcoin reached its highest level for 13 months at USD 12,489. Experts see a number of reasons for the rise. Analysts Emden Research, for example, make a short squeeze, in which short sellers have to cover themselves again, responsible for some of the climb. Declining confidence in the greenback could also play a role, however. In addition, uncertainties around coronavirus and political crises around the world are leading more and more investors to turn to bitcoin in order to diversify their portfolios.
What is known as bitcoin halving, i.e. the deliberate shortage of the BTC, could be a further driver of the development. The reward for the computing power behind the digital currency is halved every four years, the reason being that there can only be 21 million bitcoins in total, with around 18.3 million having already been generated. The last time such an event occurred was in May this year. The specialists at Coin-Ratgeber point out that the artificial scarcity resulting from the previous events in 2012 and 2016 did not set in until about a year later. Experts thus have even more confidence in bitcoin. Longforecast.com expects it to become more expensive over the rest of the year, particularly in the fourth quarter. The platform, which specialises in forecasting, sees it closing October at USD 14,120 and then potentially even passing the 15,000 mark at the end of December. According to figures from Longforecast.com, exchange rates of around USD 17,000 could even be possible at the start of 2021.