The crypto market has expanded substantially over time. Currently, there are more than 5000 cryptocurrencies in the market that offer a number of features for users.
With a massive influx of investment in the crypto sectors the value of popular cryptos like Bitcoin, Ethereum is on a rise. Large multinational corporations like Tesla as well as existing financial institutions like Paypal or JP Morgan are investing in crypto assets in order to avail the benefits of crypto transactions. With this new peer-to-peer digital currency, it is possible to make transactions at low rates.
Cryptocurrencies like Bitcoin are now considered asset class commodities because of their high value. With the availability of trading applications like Bitcoin Digital trading platform, new traders are investing in the crypto market to gain out of the increasing value of expensive cryptos. In the current article, we will discuss how it is possible to reap huge profits from crypto investments. We shall also discuss the potential gainers from crypto investments.
Bitcoin came into the limelight because of its famous bull run in the year 2017. In this period the value of a single bitcoin increased to an unprecedented high of 20,000 US dollars. This bull run made millionaires out of casual Bitcoin investors.
The crypto market is highly speculative. The prices of most cryptocurrencies are constantly fluctuating so it is difficult to predict the growth of most cryptocurrencies.
Factors affecting the value of BTC
Bitcoin is a deflationary cryptocurrency. This is due to the fact that there is only a fixed number of Bitcoins that will ever be in circulation in its lifetime. The maximum number of BTC that can be circulated in its lifetime is 21 million. This means once this upper limit is reached no more Bitcoin can be produced through mining.
The laws of the demand and supply dictate that if there is a limited number of products its price will rise with the increase in demand. It is due to this fact that it can be estimated that the value of Bitcoin can only increase over time. Current data suggest that the value of Bitcoin may even touch the 100,000 dollar mark by the end of 2021.
A sustainable ecosystem of cryptocurrency
However for the cryptos to fare well as a store of values it is important that there is a well-established system of transaction.
All the Bitcoin and other cryptocurrencies are considered a potential substitute of the Fiat currency; this is however only speculation. Fiat currency or legal tender is the most accepted means for transactions. In order for cryptos to replace legal tender, they have to be as widely accepted.
Other technological innovations like Venmo are also potential competitors of the crypto market. Venmo is a digital transaction feature launched by PayPal. This application, like Bitcoin, allows users to make transactions with their friends and families very easily and at a very low cost.
Who can gain the most out of Bitcoin?
Meltem Demirors from CoinShares, one of the most popular crypto management firms in Europe, pointed out the Mars if investment from big corporations in the crypto sectors.
The millions of dollars invested by big corporations are presently the primary factor that affects the value of Bitcoin.
Although small traders are able to reap profit out of a crypto investment the true gainers from the crypto markets are usually big corporations like Tesla. At the beginning of 2021 a staggering amount of 1.5 billion dollars. After selling its crypto assets Tesla was able to make another $1 billion profit which is around 59 % of its total investment.
Thus it is evident that only big corporations and institutions that are capable of investing billions can make the most out of Bitcoin and other crypto-assets. However, small investors can also reap decent profit, provided they are judicious in analyzing market trends.