Bitcoin's price is up nearly 16 percent so far in 2021 after being up 122 percent at one point
Is it an alternative currency? A technology? A venture capital investment? A specious bubble?. Cryptocurrency is decentralized digital money, which works based on blockchain technology.
In the past six months, cryptocurrencies have seen their prices skyrocket on the back of tweets, comments on social media, and advice from random people some of who barely know anything about how cryptocurrencies work. There are now over 4,000 Cryptocurrencies in circulation in 2021 vs 180 sovereign currencies recognized as legal tender in United Nations (UN) member states.
As the price kept moving up, everyone felt the FUD (fear, uncertainty, doubt), and started pumping even more money in a typical action that every retailer takes, not just in cryptocurrencies but in every asset class. The result is that over the recent past, many retail investors found themselves trapped in a situation they’ve been in before.
In the long run, bitcoin still makes for a unique asset class for portfolio managers seeking growth. While regulatory uncertainties still have a significant role to play, cryptocurrencies over the past decade have proved potent enough to be called an investable asset. Bitcoin is still an emerging asset class and will continue to experience large price swings. It’s here because people in the market want something other than just the traditional currencies that we’ve had and whether that’s right or wrong, it’s clearly something that the market wants.
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