Bitcoin to reach “epidemic” status as it becomes mainstream currency
The good news for Bitcoin and other cryptos is that confidence is back after global legislators relaxed views on digital currencies.
The main fear turned from crackdown on cryptos to its high volatility.
Investors need a way out if they feel threatened by high volatility and downward pressures on digital currencies.
At end last week, Bitcoin, Ethereum, Ripple, and Litecoin gained 19.87%, 10.48%, 30.57%, and 53.90% respectively, according to Forbes, quoting Coinmarketcap.com.
Bitcoin crossed the $10,000 threshold over the weekend, and is hovering at $11,000 as of publishing time of this article
Most notably, the cryptocurrency “technicals” remained strong, with 83 cryptocurrencies advancing and only 17 declining among the top 100 listed currencies.
Bitcoin becoming mainstream
There are concrete efforts to make Bitcoin a mainstream currency used in trade.
“One of them is the proliferation of Wall Street products like ETFs and Futures contracts that will allow a broader investor participation in cryptocurrency markets. In fact, it was the introduction of Futures contracts that created a great deal of buzz for major cryptocurrencies last December, and taking some of them to new highs,” said Forbes.
Making cryptos easily accessible to average investors through digital exchange platforms is also key.
Finally, making the adoption of cryptocurrencies as a medium of payment easier to major merchants will allow global businesses to tap onto digital payments.
“Already, there has been talk that Starbucks and Dunkin Donuts are considering accepting Bitcoins for their products,” said Forbes, adding that this idea is very appealing as it will create a great deal of buzz among younger customers.
“And it will drive cryptocurrency prices higher, provided that big governments, big banks, and hackers do not spoil the party again,” said Forbes.
Bitcoin exit strategies in place
According to Forbes, Wall Street has solved a big problem for Bitcoin: market volatility, paving the way for the people’s currency to gain broad acceptance among merchants as a medium of exchange.
Wall Street recently began Bitcoin Futures so that any merchant concerned about volatility prospects can now short Bitcoin Futures.
“This means that any losses in the spot market will be made up in the Futures market,” said Forbes.
“Meanwhile, Wall Street has been introducing new products, like the Bitcoin Investment Trust, that allow for broader investor participation in the Bitcoin market.”
When that happens, demand for a product turns into a cascade, and the product becomes an “epidemic” and enjoys higher prices.
Big investors lining up
Coin telegraph said Atari, the publisher of video games such as Tetris and Pac Man, has seen its share price go up more than 60% after announcing that it would invest in cryptocurrency, quoting a Bloomberg report.
According to Atari’s press release, Atari will be creating its own digital currency, the Atari Token, to be used in a Blockchain-based digital entertainment platform created by Infinity Networks, Ltd., in which Atari bought a 17.5% stake.
According to the Express, an investor, whose identity is yet unknown, has initially purchased $344million worth of Bitcoin during a period of slumping cryptocurrency prices between Feb 9 an Feb 12, that gave the buyer a total of 96,650 BTC in their virtual wallet.
Those are now worth over $1bn, with a Bitcoin wrth $11,000.
Don’t do what that investor did, unless..
According to Business Insider, the founder of Ethereum, the second most valuable cryptocurrency in the world, has warned that cryptocurrencies “could drop to near zero at any time.”
24-year-old Russian-Canadian programmer and writer Vitalik Buterin tweeted: “Don’t put in more money than you can afford to lose.”
“Reminder: cryptocurrencies are still a new and hyper-volatile asset class, and could drop to near-zero at any time. Don’t put in more money than you can afford to lose. If you’re trying to figure out where to store your life savings, traditional assets are still your safest bet.”