5 min read
This story originally appeared at high level
By Guillermo Barba
The narrative in Bitcoin is cyclical and normal given its extreme volatility: when it drops from highs, The critics say that the most popular of the cryptocurrencies “has no future and is dead”. On the other hand, as it approaches or hits new price records, His apologists start talking that it will go up 10, 100 or a thousand times higher.
What is the reality This Bitcoin is a monetary experiment with less than 12 years of age, of which no one knows whether it will succeed in consolidating itself as a globally recognized system for electronic trading. We must not forget that this was the purpose of its creation, but it cannot be achieved as long as its high volatility continues to make it unprofitable. for setting prices that can be converted into currency at a more or less stable exchange rate.
Maybe one day Bitcoin will achieve this stability, but in the meantime The truth is that amateur and professional investors will continue to use it as an ideal tool for “trading”. (Buy / Sell) which is a great way to make big profits (and losses) quickly.
In short, we must not let ourselves be guided by emotional extremes, but rather by the fundamentals of supply and demand for Bitcoin, which are getting stronger and stronger and, like other instruments, mark their greatest long-term trend.
For example, Square Inc. made a massive $ 50 million purchase of bitcoins last October. He did this by considering “that cryptocurrency is an instrument of economic empowerment and an opportunity to participate in a global monetary system that is aligned with the purpose of the company.”
Square is an American company based in San Francisco, California that specializes in financial services, mobile payments, and small business services. It’s been listed as a public company on the New York Stock Exchange since November 2015, but the highlight is that it’s ag1st global tech company to add Bitcoin to its balance sheet.
In addition to Square, new companies have joined the launch of Bitcoin this year, such as electronic payments giant PayPal, which announced in late October that its users could buy Bitcoin and other cryptocurrencies like ETH and Bitcoin Cash, and Litecoin.
Even with the arrival of the COVID-19 pandemic, see pWe have presented phenomena on the one handhave facilitated both the trade and the use of the various forms of electronic money that exist.
Do not let yourself be guided by emotional extremes, but rather by the ever increasing supply and demand bases of Bitcoin / Image: André François McKenzie on Unsplash
Containment, “healthy distance”, the habit of avoiding direct contact between people, including handling cash, are forcing more and more people to use retail and digital payments.
On the other hand, the cessation of economic activity that triggered the worst global crisis and recession in a century, has led governments and central banks around the world to launch a “nuclear bomb” of fiscal and monetary stimulus that will cause inflation of new financial bubbles.
For this reason, which is already the biggest injection of money and debt ever, the assets to invest in are the ones that will continue to be in demand because: When financial bubbles burst, they will bring their owners ample returns from a desperate search for a solid haven of value.
These assets naturally include strong currencies (dollars, euros, yen), gold and silver, as well as bitcoin, cryptocurrencies and real assets.
In short, we must avoid falling into the error of discrediting Bitcoin. Cryptocurrencies are here to stay, and with increasing adoption by big players and retail investors, their upward trend will continue to drive their prices to unpredictable levels.