Though it has been thirteen years since the first blockchain transaction, Bitcoin is still the most valuable project in the cryptocurrency asset category. Why is that so? It is by far the most valuable digital asset in terms of size and liquidity, with a market cap currently surpassing $424 billion and daily trading volumes surpassing $25 billion.
Because of these financial facts, Bitcoin is crucial for any investor wanting to profit from cryptocurrencies as well as anyone curious about how this new asset class functions. But why is it so well-liked?
This article will explains why Bitcoin is still king, despite the fact that the market for digital assets is expanding to new heights and incorporating new features for global economics.
The very first successful application of a digital asset that used blockchain technology to create a decentralized, electronic peer-to-peer cash system was Bitcoin (BTC), which was introduced in 2009 as a response to the Global Financial Crisis (GFC). Another cryptocurrency didn’t come out for about 2 years, during which more than 8 million Bitcoins had already been mined, giving BTC a significant first-mover advantage.
Since then, Bitcoin and other cryptocurrencies have experienced a sharp rise in global interest and mainstream media coverage, creating a multi-trillion dollar industry and having an increasingly negative impact on legacy markets and conventional financial institutions.
Bitcoin’s market capitalization increased from just over $0.01 billion to more than $424 billion at this time since its launch.
Bitcoin has not only experienced impressive growth in terms of trading volume but also in terms of market capitalization. The daily trading volume for Bitcoin is currently greater than $25 billion, according to information from CoinMarketCap.
Why is Bitcoin the most considerable cryptocurrency even today?
The following explains why bitcoin is still the most significant cryptocurrency available today:
The strong network effect of Bitcoin has helped it become the most significant cryptocurrency. Bitcoin is a secure investment for all those searching to get involved in cryptocurrencies because of the size and scale of the network, which makes it extremely robust and difficult to attack.
Store of Value
Many factors have contributed to Bitcoin’s rise to prominence as a cryptocurrency, but what sets it apart from its rivals is its primary function as a store of value.
Even though Bitcoin has experienced significant volatility over the past ten years, its liquidity is still one of the main reasons it remains the most popular cryptocurrency. According to recent data, Bitcoin has the highest level of liquidity on the cryptocurrency market, typically accounting for more than 60% of all daily exchanges.
The many benefits that Bitcoin offers are undeniable, and decentralization is what distinguishes it from other cryptocurrencies. Bitcoin has a much higher level of trust than other cryptocurrencies due to its decentralized nature and reliance on cryptography alone for transaction execution.
BTC currently processes about 7 transactions per second, compared to over 5000 transactions per second for centralised payment companies like Visa and Mastercard. Like BTC, the majority of blockchains are developed in isolation and are unable to communicate with other chains that follow a different consensus. To ensure efficiency and scalability in the long run, it becomes essential to interact with other blockchains. Bridges are useful in this situation.
Bitcoin as Legal Tender
In 2001, El Salvador gave up its own national currency in favour of the US Dollar, and just recently added Bitcoin to the list of accepted currencies. Debt settlement and commercial services must abide by national laws, which means businesses must accept BTC and USD as methods of payment.
The fact that BTC has been accepted as legal tender sets it apart from its competitors and makes it easier to achieve Bitcoin’s original objective of serving as a substitute for fiat.
Bitcoin: What kind of investment is it?
The nature of Bitcoin as an investment is still up for debate after more than ten years. Bitcoin ownership differs from stock ownership in a company. In contrast to a business, Bitcoin doesn’t make money by offering goods or services for sale. Neither does it pay dividends. It also lacks a CEO, board of directors, or other central organization that can set goals and be held accountable.
Raw materials like metal, grain, and milk are thought of as commodities. The Commodity Futures Trading Commission, the government body most involved in cryptocurrency regulation, oversees the commodity markets in addition to overseeing foreign exchange trading.
Why Do Some Individuals Think Bitcoins Are Meaningless?
The cost that people are willing to pay for Bitcoins is, like the cost of any asset or thing of value, a socially determined level that is also based on supply and demand. Some people struggle to understand how scarce and expensive Bitcoins are since they’re virtual and only occur within computer networks. They continue to believe Bitcoins are worthless because they are unwilling to believe that digital traces can have value in this way. The Bitcoin system is valuable, according to others who are familiar with it.
Future of Bitcoin
Bitcoin’s and other cryptocurrencies’ futures appear to be very bright. Adoption of digital currencies is steadily rising as more people become aware of their potential to transform the global economy. Bitcoin is in a strong position to maintain its leadership position in this quickly developing field thanks to its benefits in terms of security, transparency, and decentralization.
The significance of BTC and its impact on the market cannot be overstated. Resistance has been expressed because Bitcoin is the only cryptocurrency that is recognized as legal tender. However, as long as committed developers and community members work hard, Bitcoin will continue to be the unquestioned “King” of Cryptocurrencies, even as institutional investors pour billions into the market.