Maybe you’ve noticed that many people are talking about Bitcoin trading. And this is not without reason. Trading this virtual currency is a popular way for people to make money online. And Bitcoin is always in the news.
Today, Bitcoin is arguably a polarizing cryptocurrency in financial markets. And it’s even outshining the physical gold price. So, why is Bitcoin trading so popular? Here are some of the reasons.
Scarcity Factor
Satoshi Nakamoto created Bitcoin in 2009. At the same time, this person or group limited this virtual currency to 21 million tokens. Thus, the world can’t have more than 21 million coins. Currently, the world has 18.5 million bitcoins, which is around 90% of the total amount.
People mine bitcoins digitally using specialized computers that consume a significant power amount. Using special software, Bitcoin miners solve mathematical puzzles to get new tokens as their reward. Satoshi made tokens challenging to mine as miners near the maximum float. Experts estimate that miners will take around 120 years to generate the remaining 10% of the coins.
Bitcoin’s supply limit or scarcity is a primary reason why trading this virtual currency is so popular. Ideally, the belief that people will have fewer opportunities to obtain Bitcoin and that only a few people will have this cryptocurrency is why everybody wants to trade or own it.
Familiarity
Bitcoin lacks the tradition or cachet of other assets that people have used for years, including gold, whose history stretches to thousands of years back. People have used many assets as their exchange medium and value storage.
But Bitcoin’s popularity has grown among institutional investors and average folks alike. Many people call this virtual currency an uncorrelated asset, with no direct link to price swings in bonds, gold, and other assets. For this reason, some individuals are rushing to platforms like crypto engine to purchase Bitcoin as their financial hedge.
In these markets, derivatives take a vital role, ensuring the availability of product variety for active traders. What’s more, they advance traders’ understanding of risk management and market dynamics.
The Mainstream Appeal
Recently, PayPal announced the move to allow users to purchase Bitcoin on its platform. This decision propelled Bitcoin’s legitimacy further. For this reason, institutional investors, family businesses, and other entities are thinking about ways to trade or invest in this digital currency.
Trading Bitcoin is no longer a gold rush. Instead, it’s an investment in a digital asset. And more institutional adoption and mainstream appeal prompt more people to start trading or investing in this digital currency.
Low Trust in Government Currency
Satoshi Nakamoto created Bitcoin due to distrust in central banks and the 2008 crash. Ideally, people know that central banks and governments can manipulate traditional currency, affecting people’s lives negatively.
For instance, Argentina has manipulated the government-issued currency for years. And this has prompted more people to start trading Bitcoin. Ideally, many people trade Bitcoin to rid the world of unreliable central banks. What’s more, third parties and intermediaries in the traditional financial system charge hefty fees.
The Future
Most people trade Bitcoin because they believe it’s the future of money. To some people, Bitcoin is the next major revolution. Traditional currency should undoubtedly function more efficiently. Unfortunately, the conventional financial system and cash are inefficient and costly.
Consequently, people are trading Bitcoin, believing that it will eventually overtake traditional currency. Thus, people think the world will have trustless, private, and free transactions.
The Bottom Line
The number of people trading Bitcoin has undoubtedly increased over the years. And this shows that more people have faith in this digital currency. Nevertheless, take your time to understand how this virtual currency works and select a reputable Bitcoin trading platform.
