digital currency

3 Reasons Why Bitcoin Price Could Crash in 2020

Three weeks ago, Bitcoin climbed to over $12,000 only to crash in a matter of minutes for $1,500. Investors got chills from such a huge plunge in a short time, and many are now questioning whether or not Bitcoin is able to maintain its value, or if the crash is inevitable. While the coin was taking a dive, 72,000 people decided to quickly sell their Bitcoins which brought down market capitalization from $214 billion to $208 billion. This may not seem like a big deal to ordinary folks who have no investments in digital currency, but in the currency exchange market circles, this is all investors talk about. Bitcoin seems to be justifying the suspicions that followed it from the first day, and now many are in doubt whether to keep the coins or cut their losses and run.

Source:forbes.com

Safer alternatives

This is a second hit for Bitcoin since the beginning of the pandemic back in March when it crashed to a value of a little over $4,000 for 1BTC. The currency is still standing and despite everything, is looking good with the little change for the past couple of weeks, but the traders are not so convinced. Many are questioning their decision to buy coins instead of gold which gained over 15% in value in the past few months.

Speculators are already rumoring that Bitcoin should be converted into more stable assets, with gold topping their choices. However, there have been some good predictions about Bitcoin circulating, like PayPal offering payments to its users in BTC, and Bloomberg suggesting that the coin could hit a $14,000 mark by the end of the year. Still, others seem to be scared of to further invest in an unstable currency and are looking for other sources and potential stakes.

In the last couple of years, investors have been at odds whether to keep Bitcoin or sell and invest in something else, namely gold. The price of gold spiked recently, mostly due to the banks stocking up on the assets, and being cautious since Federal Reserve started printing a lot of money to minimize the pandemic crisis. Will the gold manage to keep the trend of rising or is it just a temporary thing, only time will tell. In the meantime, speculators are buzzing about the weakened American dollar pointing out that it’s the best time to make gold reserves.

Source:express.co.uk

Domino effect

Major banks are suggesting that the market is about to crash which can pull down cryptocurrencies among other markets. One of the main reasons why Bitcoin is maintaining stability and value to some degree is the demand from Chinese investors through Tether. Tether is a US dollar-backed coin that was highly controversial since the creators claimed that every coin is backed by $1. In 2019 this all blew up and the Tether developers admitted that the coin actually was backed up by US dollar and loans. This “loan” part made it unstable and undesirable among investors. So, back to the Bitcoin. Currently, its value is closely dependent on the demand, if any, from the Chinese traders. If they decide at any point to move their investments into hedge funds, Bitcoin might lose the legs it’s standing on, and go down with the rest of the companies on the market.

Billionaires and some millionaires on the Wall St are wary of further investments until the markets are stable again. Many companies are struggling to remain liquid while the pandemic is still in effect. Big players on the New York stock exchange were not favoring Bitcoin even before the coronavirus crisis started saying that the currency that is backed by thin air is doomed. Today, investors are backing out of deals that they otherwise would not, and investing in cryptocurrencies right now is not even an issue. Truth be told, major investors are not thinking about investing in anything right now, but rather are just looking for ways to strengthen their hedge.

International Monetary Fund issued a statement saying that no one can predict with a decent amount of certainty how exactly pandemic is going to influence the markets. Uncertainty is not a friend to the investors and traders, and they tend to stay away from spending on fluctuating investments like Bitcoin. Pandemic completely disrupted trading, and no one can predict how it’s going to behave in the months to come. Because of this high net worth investors are laying low, trying to save their investments, and not making new ones. This could bring a market to a standstill and eventually crashing. When Federal Reserve started injecting more money into the economy to cover for all stimulus checks to boost consumerism and revive job markets, it sent the signal to banks and investment funds that the markets are in dire straits. This made investors put the hold on all investments and hold on to see new developments.

Influence of the stock markets

Source:investopedia.com

In the past year, every time Bitcoin came close to breaking an all-time high of $10,500 it suddenly dropped for a few thousand. This is a vicious cycle that keeps repeating itself. Even though Bitcoin is not backed by any asset, and is not controlled by any government, the stock markets do impact its value. Bitcoin is all about being not influenced by the movements of the traditional markets, but somehow it gets dragged under every time stock exchanges go under. So, we can determine that Bitcoin is not tied up to anything, but it is affected by the value swings of the stocks.

Will Bitcoin crash along with stock exchange? No one knows for sure. If you decide to invest in the current environment you should be more careful than usual. Stock exchanges around the world are struggling to keep moving, but the reality is that the major economies are on their knees. Maybe Bitcoin will survive one more crisis as it did before in the past, although many predict that it will be pulled down along with other stocks. In any case, do your research and get more information at https://infinitytrader.app/ before you make any moves that can cost you dearly.

What is Bitcoin and How Does it Work? – 2020 Guide

As a newbie, you might get confused regarding what is bitcoin, and how does it work? Like most of the other people, you might find the concept of bitcoin quite confusing. In this article, we will help you find out all the details you need to know about it and its working process.

What is Bitcoin?

img source: investopedia.com

It is a digital currency token having no solid backing. It can be quickly sent electronically from one person to the other all over the world. The smallest fraction of this coin is named as a penny of BTC. It can be divided into eight decimal places, i.e., 0.00000001 bitcoins. It is named Satoshi, who is considered as the anonymous creator of this cryptocurrency.

The network is working on a decentralized network of computers all across the globe. A complete record of these transactions that these computers handle and update regularly is known as the blockchain.

Are these coins the Ones that We See in Photographs?

You might have seen this cryptocurrency as coins in photographs or newspapers. But in actuality, these are not coins. Those pictures are just an identity of the bitcoin. Those coins are the symbols that the journals use to portray. The reason is that they don’t have anything else to illustrate the news about BTC.

Bitcoin Works through Blockchain

img source: alphagamma.eu

Blockchain was first described back in 2008 by a person or people calling themselves Satoshi Nakamoto. We have seen that there are different types of cryptocurrency techniques, and many blockchains have been created on the concept of these techniques.

The basic understanding of blockchain is quite straightforward. You can earn money and do trading through different platforms and you can take insidebitcoins.com as an example. One chain contains only one blockchain, and all the information is stored in different blocks that is a secure way. All the stored data in blocks are in the form of 0s and 1s and minimize the hacking risk—the information secured in the blocks may be emails, land titles, marriage certificates, or bond trades.

When we talk about the contract, it is developed between two parties without the involvement of a third party. There are many possibilities for the products for each person, and everyone can secure the payments. It does not involve banking security, and all your emails and data save from end to end transaction.

Bitcoin Transactions

These transactions are more robust, and there are different wallet ids, and transactions are done between the wallets. BTC wallets store these transactions in a secret piece of data named as a private key or seed. This confidential data is helpful in signing transactions that help provide a mathematical proof that the transaction has come from the owner of the wallet.

The signature prevents the transaction so that it does not get altered by anybody once it has been issued. The deals are broadcasted to the network and get confirmed within a few minutes through the process of mining.

Bitcoin Mining

img source: supercryptonews.com

The process of making new coins and passing them on to the computers to maintain a robust network is called mining. These computers are in a consistent race to process new transactions coming to their system.

The person with the fastest computers stands out to be the winner, and he gets a chunk of new coins. A new winner is announced every 10 minutes.

The process of mining brings in a competitive lottery that prevents a person from adding new blocks to the blockchain. So, no individual can control in any way what is happening in the blockchain.

How can You Buy Bitcoin?

There are some BTC local agencies where you can get your desired cryptocurrency. Many companies sell these coins. A company named Coinbase will sell you digital currency in exchange for dollars.

Signing in for a bank account with Coinbase is similar to opening a traditional bank account. You will have to provide all your details.

How is the Worth of Bitcoin Decided?

img source: independent.co.uk

The value keeps on rising and falling. Its value is determined by the open market. It also depends on the bidding in crypto exchanges.

Does BTC Have Any Competitors?

Yes, it has plenty of competitors. BTC is the most used cryptocurrency and there are many competitors, but people rely on this currency. In the real world, the currency is worth only things that people are willing to accept as goods and services.

Criminal Nature of Bitcoins

img source: economy.com

Criminals like to deal with crypto. The reason is that trading does not require complex trading and identity verification. To open an account, you don’t have to pass through a lot of identification processes. Moreover, there is no central authority that collects or controls this information.

These days the cryptocurrency has become a method to make ransom payments. For example, your computer might be controlled by ransomware, and you may be asked to pay ransom payment in the form of bitcoins.

Can Bitcoin Users share it Themselves?

If a person is helping to maintain the database of all the bitcoin transactions, then the blockchain could change his copy of the records to add more money. However, if someone does that, the other computers maintain the records would consider that as a discrepancy and would reject that.

What are the Legal Uses of Cryptocurrency?

img source: wikimedia.org

The transactions made through bitcoins revolve around selling and buying Bitcoins on exchanges and predicting future prices. No one wants to lose their currency, and in most of the countries, people get the currency from the local exchanges and trust them.

Another meaningful business strategy is using this cryptocurrency to transfer money over international borders. It may take weeks if the money is transferred through banks. Although, many companies use bitcoin for transferring payment and you can send a lot of dollars in seconds. That’s why it has gained a significant reputation all over the world.

Conclusion

We hope this article helped you in finding out what is it and how it works. The process of buying and investing in this coin might become more comfortable for you now.

Top Three Digital Currencies

In the past few years, crypto-currency evolved into something much larger, and it is safe to say that it caught the attention of popular banks and communities such as Wall-Street.

About a decade ago, the Bitcoin was barely something that people have heard off, today, it is much larger, and it is still on the rise. Despite that the “bubble burst” happened earlier in 2018, experts say that it is not the first time, nor the last time either. Which means, they predict the rise of Bitcoin and other crypto-currencies again. In this article, we are going to list what we think are the top three digital currencies that are going to be pretty successful in the next couple of years.

The Bitcoin (BTC)

Img source: bitcoinist.com

Known as the “Mother of all Digital Currencies,” the Bitcoin reached an unbelievable price of $22,500 in the last year. It had its ups and downs, and even though it is “on the low” at the moment, crypto-experts are suggesting that rise is on the way. There are many advantages of using the Bitcoin, one of the greatest ones being the no fees and no middle-men, which is the entire point of the crypto-currency idea. It is just a matter of time when the block-chain technology will start to see much greater use in everything around us, so you should be expecting the Bitcoin to gain even more popularity in the next few years.

One of the most frequently asked questions in the world of crypto-currency was, and probably still is, “Where do I store my funds?” Well, your digital funds can be stored in such called “Crypto-Currency Wallets”. And there are quite a few to choose from, but when it comes to making sure your funds are safe and not stolen, it is really important to make the right choice. We suggest using the Ledger Nano S, as it is the safest form of a wallet that you can store your digital currencies in. Make sure to check it out.

IOTA (MIOTA)

Img source: ethereumworldnews.com

IOTA is a very well made crypto-currency, and instead of using the block-chain technology method, they are using something which is called “The Tangle”. This is expected to be much faster and more reliable than the Block-Chain, as well as have more transparency in the transactions. It is still under development, so make sure to read more about it as it has the potential to be the next big thing in the next couple of years.

Ripple (XRP)

Ripple is a real-time global settlement network that has the idea of offering instant transactions and very low-cost international payments. It was launched back in 2012, and it made a lot of progress during the last couple of years. Ripple is quite different than Bitcoin and a few other Altcoins, and it cannot be mined.

Img source: bitcoinist.com

Currently, Ripple holds third place on the list of digital currency coins, with only Ethereum and Bitcoin being in front of it. Experts say that Ripple will also be one of the first coins to bloom after the crypto-market starts getting back on its feet again in the upcoming periods.