The virtual currency markets have seen considerable interest from investors over the last few weeks. Investors who would not be deemed conservatives, have been buying cryptocurrencies and, in particular, the most widespread virtual currency, Bitcoin (BTC). In the last 24 hours alone, BTC’s virtual currency has seen an increase in its exchange rate against the US dollar (USD) by more than 7.4% of its previous exchange rate. Meanwhile, Ether (ETH), the second largest cryptocurrency in the world, reached a new record high of US$ 1,424.83 per ETH.
On 26 January 2021, the aforementioned cryptocurrencies, both BTC and ETH, are undergoing a decline in their price. According to analysts, this is due to investor profit withdrawals after an attractive profit was made in a short time. On the same date at 10:52 am CET, the virtual currency Ether traded at a mutual exchange rate of US$ 1302.62 per ETH, with a daily ETH decline of -3.01% on the Coinbase digital currency market. The most widespread virtual currency – BTC – traded on the same market at US$ 31,649.86 per BTC, with BTC declining by -2.71% against the USD so far.
Bitcoin is an internet open-source P2P payment network and also the crypto currency used in this network. Bitcoin’s main uniqueness is its full decentralization; it is designed so that no one, including the author or other individuals, groups or governments, can influence the currency, falsify, confiscate accounts, control cash flows or cause inflation. There is no central point in the network, and no one can make decisions. The final amount of bitcoins is known in advance and the release of bitcoins into circulation is defined in the network source code. There are minimal or no cost payments. The network has been operating since 2009 and it was created by a group of people known as Satoshi Nakamoto.
According to cryptocurrency analysts Bitcoin is the only medium of exchange that can offset central banks printing money. “Bit gold” and “b-Money” concepts were the basis for the creation of Bitcoin. There is now an official software client for payments, managed by volunteers from around the world and several alternative clients. Since 2011 conferences have been held all around the world on Bitcoin, economy, possibilities and implications of this currency. In September 2012, the non-profit company Bitcoin Foundation was established to take care of the Bitcoin infrastructure, monitor threats and possibly improve protocols, organize conferences and promote the currency. However given the decentralized nature of the network, the foundation has no special powers as the majority always makes decisions. In 2014, the Apache Software Foundation, a non-profit organization, began accepting donations in Bitcoins.
However, in terms of the future development of the virtual currency market and especially BTC, the predictions of analysts and digital currency market financial strategists vary and there is practically no majority view, like it was at the end of 2020. BTC, the biggest cryptocurrency, according to its current market value, had a very dynamic start at the beginning of this year. After last year’s fourfold increase in the price, then for the first time this year – on 7 January 2021 – briefly exceeded the limit of US$ 40,000 per BTC. Supporters of this digital currency say that increased interest in BTC has benefited from increased institutional demand and its perception as a gold-like safe harbor asset, but some skeptical analysts fear that BTC is in a so-called price bubble.