What is Bitcoin?
We are gonna talk about that Bitcoin Price Surges by 3.9% to Over $28,000 in October. Let’s first talk about Bitcoin. Bitcoin is a digital currency that operates on a decentralized network of computers around the world. It was created in 2009 by an anonymous person or group using the name Satoshi Nakamoto. Bitcoin transactions are verified by network nodes and recorded in a public ledger called a blockchain.
Why did Bitcoin price increase?
The Bitcoin price surges by about 3.9% to $28,173, the highest level since August 17, thanks to the recovery of inflows into the cryptocurrency at the beginning of October trading. According to data from CoinMarketCap, the market capitalization of Bitcoin reached $526 billion, accounting for about 44% of the total cryptocurrency market.
There are several factors that contributed to the rise of Bitcoin price in October. Some of them are:
Increased adoption by institutional investors and corporations:
More and more institutional investors and corporations are showing interest in Bitcoin as a store of value and a hedge against inflation. For example, MicroStrategy, a business intelligence company, announced that it had purchased an additional 5,050 bitcoins for $242.9 million in cash, bringing its total holdings to 114,042 bitcoins. Similarly, Twitter, a social media platform, revealed that it had added $1.3 billion worth of Bitcoin to its balance sheet.
Positive regulatory developments:
Several countries have taken steps to regulate and embrace Bitcoin and other cryptocurrencies. For instance, El Salvador became the first country to adopt Bitcoin as legal tender on September 7, allowing its citizens to use it for everyday transactions. Moreover, Ukraine passed a law that legalized and regulated Bitcoin and other digital assets on September 8. Additionally, Brazil’s central bank authorized the use of a blockchain platform for instant payments on September 22.
Technical factors:
Bitcoin also benefited from some technical factors that boosted its price momentum. One of them was the successful activation of Taproot, a major upgrade that improved Bitcoin’s privacy, scalability, and security on August 11. Another one was the formation of a bullish pattern called a golden cross, which occurred when the 50-day moving average crossed above the 200-day moving average on September 14.
What are the challenges and opportunities for Bitcoin Price Surges?
Despite the impressive performance of Bitcoin Price Surges by 3.9% to Over $28,000 in October, there are still some challenges and risks that could affect its price in the future. Some of them are:
Volatility and unpredictability:
Bitcoin is known for its high volatility and unpredictability, which means that its price can fluctuate significantly in a short period of time. This can be influenced by various factors such as supply and demand, market sentiment, news events, hacks, scams, regulations, etc. Therefore, investors and traders should be prepared for potential losses as well as gains when dealing with Bitcoin.
Environmental concerns:
Bitcoin consumes a lot of energy to power its network and validate its transactions. According to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin’s annualized electricity consumption was estimated at 121.36 terawatt-hours (TWh) as of October 4, which is comparable to the energy consumption of countries like Argentina or Norway. This raises environmental concerns and criticism from some governments and activists who argue that Bitcoin contributes to global warming and climate change.
Competition from other cryptocurrencies:
Bitcoin faces competition from other cryptocurrencies that offer different features and advantages. For example, Ethereum is a platform that enables smart contracts and decentralized applications (DApps) that can run on its network. It also supports non-fungible tokens (NFTs), which are unique digital assets that can represent anything from art to music to sports memorabilia. Another example is Cardano, a blockchain project that aims to provide a more scalable, secure, and sustainable platform for smart contracts and DApps.
However, there are also many opportunities and possibilities for Bitcoin in the future. Some of them are:
Mainstream adoption:
Bitcoin has the potential to become more widely adopted by mainstream users and businesses as a form of payment, investment, or savings. This could be facilitated by the development of more user-friendly and accessible platforms and services that enable people to buy, sell, store, and use Bitcoin easily and securely. For example, PayPal, a online payment system, launched a service that allows its customers in the US to buy, sell, and hold Bitcoin and other cryptocurrencies in their PayPal accounts. Similarly, Visa, a global payment network, announced that it had processed more than $1 billion worth of cryptocurrency transactions on its network in the first half of 2021.
Innovation and improvement:
Bitcoin has the potential to become more innovative and improved by adopting new technologies and features that enhance its functionality and performance. For example, the Lightning Network is a second-layer solution that enables fast and cheap transactions on top of the Bitcoin blockchain. It also allows for cross-chain interoperability, which means that Bitcoin can be exchanged with other cryptocurrencies without intermediaries. Another example is the Schnorr signatures, a cryptographic technique that improves the efficiency and privacy of Bitcoin transactions.
Global impact:
Bitcoin has the potential to have a positive impact on the global economy and society by providing a more inclusive, transparent, and democratic alternative to the traditional financial system. For example, Bitcoin can empower people who are unbanked or underbanked, who lack access to basic financial services such as bank accounts, credit cards, or loans. Bitcoin can also enable people who live in countries with unstable currencies, high inflation, or political turmoil, to preserve their wealth and value. Bitcoin can also foster social change and innovation by supporting various causes and initiatives that use its technology for good. For example, BitGive, a non-profit organization, uses Bitcoin to fund charitable projects around the world.
To know more about Bitcoin and Cryptocurrencies :
https://trendtheday.com/ow-the-eu-regulating-crypto-assets-in-2023/
Conclusion
Bitcoin is a remarkable phenomenon that has revolutionized the world of money and finance. It has shown impressive growth and resilience in October, reaching new highs and attracting more attention and adoption. However, it also faces some challenges and risks that could affect its price and future. Therefore, investors and traders should be cautious and informed when dealing with Bitcoin. Nevertheless, Bitcoin also offers many opportunities and possibilities that could make it more valuable and impactful in the future.