Despite the fall of one of Bitcoin’s largest and most established exchange company, bitcoin is on the rise again after a very turbulent month! Why bitcoin refuses to die? It’s one of many questions people have been asking since Mt. Gox went down with over $600 millions worth of customers’ bitcoins that led to Mt. Gox filing for bankruptcy protection. Bitcoin prices are on the rise!
The virtual currency skeptics had a ball. Some even took to the world’s biggest media outlets to echo the ‘I told you do’ phrase most commonly used when one predicts the destruction of something. The backers of bitcoins, however, wants to have the last laugh. Bitcoin prices rose for the first time this week and poise for a big come back.
Bitcoin Prices on The Rise!
Some say that bitcoin was way over valued and what happened is simply price adjustment. But we’re believe bitcoin prices are about to surprise everyone. The episode at Mt. Gox should only serve as an opportunity for the future of bitcoins and for more serious exchanges and investors to step up. Even one of the most conservative congressmen Former U.S. congressman Ron Paul once said bitcoin could be an alternative to the United States dollar.
According to the independent, there are 3 reasons why bitcoins will not go away:
1. People that matter believe in it.
If you line up the flag-wavers against the naysayers, it’s hard to ignore the comparative make-up of both.
Promoters of the crypto-currency are often doers and creators. They are people like Marc Andreessen or senior web industry business executives: engineers and entrepreneurs who are currently creating a lot more wealth than other industrial sectors. This indicates that when they believe passionately in something, they build things to support it.
By contrast, many of the most vocal sceptics fit the profile of institutionalised vice-presidents with personal and professional capital invested in the status quo. They work for banks, listed investment firms and other financial organisations with nothing to gain – and plenty to lose – if systems like Bitcoin continue to take root in the public consciousness.
A very common reason against Bitcoin given by besuited naysayers is: “I don’t understand it.” In a world dominated by vague derivatives and CFDs, is this really the clincher argument?
2. Chinese investors like it.
As others have pointed out, the rise in Bitcoin’s value was sharpest when China’s oldest Bitcoin exchange – BTC China – took on funding. Even though the crypto-currency is banned in China, Chinese investors have poured into Bitcoin.
3. Bitcoin seems to have earned confidence.
One of the key elements to any would-be currency – particularly one that is not backed up by an asset such as gold – is confidence.
In the case of an established currency such as the dollar, that confidence is the sovereign commitment of the government and institutions.
While Bitcoin has nothing approaching that level of depth, its survival of the Mt Gox meltdown is a significant test passed. It signals to potential users and investors that if another such event happens, their virtual worth may not vanish overnight.
To be clear, I do not own any Bitcoin. Nor am I likely to buy any soon (journalists are usually not investor-grade individuals). But I can clearly see a use for Bitcoin: with a little more development, it is a very efficient, frictionless way of transferring money and taking payments.
If I can see this, there are millions of far cleverer people who can also see it. I wouldn’t bet on Bitcoin dying anytime soon.
What are your reasons why bitcoin will not die?
[Photo Credit: ihavebitcoins]