Why Bitcoin is Making a Comeback

By Jordan French Jordan French has been verified by Muck Rack's editorial team
Published on August 31, 2020

Nowadays, Bitcoin has become somewhat of a buzzword due to its rising value and spotlight in the media.

Although it used to be relatively unknown, it is now becoming more accessible to the public due to the numerous applications that allow secure bitcoin transactions. It is often stored in a digital wallet for safekeeping on a smartphone or computer, due to the prevalence of hackers. As a form of decentralized currency, it also eliminates banking fees and can be used for mobile payments. For instance, music streaming services like Feedbands pay artists and listeners in Bitcoin while planting trees at the same time. In recent months, it has risen in value due to a weaker global economy, central bank intervention, and declining interest rates.

The monthly trading volume of cryptocurrencies including Bitcoin and Ethereum jumped to a new high in February 2020 and has remained relatively stable thus far. Currently, the buyer demographics that are fueling interest in Bitcoin include well-educated men who have a higher rate of income. Statistics show that almost 8 out of 10 cryptocurrency investors have an average annual income of $130,000. Interestingly, Millennials aged 26 to 40-years make up 57% of cryptocurrency consumers, while Gen Xers aged 41 to 55-years account for approximately 30%. In fact, a new study has found that approximately 15% of American adults own at least one type of cryptocurrency. Over half of them are first-time investors this year.

With the current ultra-low interest rates, Bitcoin could potentially act as a safety net against inflation. Analysts and cryptocurrency fans are likening Bitcoin to gold, in the sense that it can function as a safe haven during economic downturns. Seamus Donaghue, vice president of sales and business development at METACO describes how “Given its limited supply and growing institutional acceptance, Bitcoin will also likely benefit from the market seeking inflation hedges.” In addition to this, reputable investors including hedge fund manager Paul Tudor Jones have influenced the industry with their movements. He has recently made claims that he has been purchasing Bitcoin amid the central bank printing more money.

Another factor that has contributed to the recent rise of Bitcoin is the emerging trend of crypto-related apps. These have been nicknamed “DeFi”, which is short for decentralized finance. Many of these apps and services make the process of borrowing, lending, and trading assets online more accessible to consumers. Due to this, a growing number of investors are looking into cryptocurrency trading platforms that enable them to speculate on the prices of Bitcoin, Ripple XRP, and Ethereum. Compared to traditional assets, they tend to be more high-risk due to their volatility, but using price alerts and stops can help minimize potential losses. However, compared with the total value of other cryptocurrencies, DeFi still represents a relatively small portion of the sector, with some potential for growth.

When it comes to the future value of Bitcoin, it still remains relatively uncertain. Some executives who are leaders in their respective industries offer varying opinions on where it is headed. The CEO of credit card startup Brex, Henrique Dubugras, said: “I believe it will be a better way to store value in countries where the currency is pretty volatile.”

Similarly, Barry Silbert, the CEO of Digital Currency Group, describes how it possesses all the same attributes as gold, without the historic backdrop and prestige. However, it makes up for it in accessibility and utility. Currently, its appeal to investors remains undeniable, with the potential for further gains ahead.

By Jordan French Jordan French has been verified by Muck Rack's editorial team

Journalist verified by Muck Rack verified

Jordan French is the Founder and Executive Editor of Grit Daily Group, encompassing Financial Tech Times, Smartech Daily, Transit Tomorrow, BlockTelegraph, Meditech Today, and flagship outlet, Grit Daily. The champion of live journalism, Grit Daily's team hails from ABC, CBS, CNN, Entrepreneur, Fast Company, Forbes, Fox, PopSugar, SF Chronicle, VentureBeat, Verge, Vice, and Vox. An award-winning journalist, he was on the editorial staff at TheStreet.com and a Fast 50 and Inc. 500-ranked entrepreneur with one sale. Formerly an engineer and intellectual-property attorney, his third company, BeeHex, rose to fame for its "3D printed pizza for astronauts" and is now a military contractor. A prolific investor, he's invested in 50+ early stage startups with 10+ exits through 2023.

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