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Rotterdam – In 2009, bitcoin saw the light of day. Many other cryptocurrencies followed suit. Cryptocurrency is still very popular at the moment. Many investors have had the coin in their portfolio for a while. If you want to know what the price expectations are in the near future, what the risks are and how to buy crypto, read on.
What is bitcoin again?
For anyone who no longer knows what bitcoin and the underlying technology was, here is a quick summary. Bitcoin is a cryptocurrency that can be used worldwide to make payments. Paying with the currency works without a central bank. The transactions take place between users. Transactions take place via blockchain, the underlying technology behind bitcoin. You can also invest in bitcoin. There are risks associated with this because the Bitcoin price is very volatile. This means that the price can shoot up, but also suddenly fall sharply.
The History of the Bitcoin Price
In 2013, one Bitcoin was worth $13.50. Within a few months, the price suddenly rose to $220 and fell again by $70 within weeks. Over time there have been many ups and downs. In 2017, the currency really took off and the price was almost 20,000 dollars. In 2021, Bitcoin reached a price value of around $65,000 before falling again in 2022 to a value of around $20,000.
What is the long-term price outlook?
Bitcoin is the most well-known cryptocurrency and still has great potential. In the long term, the estimated price increase could be huge. Some analysts predict that the long-term value of Bitcoin may reach as much as $100,000. Other analysts even predict that a million dollar bitcoin value is possible. The future will show what it will be.
Investing in cryptocurrencies, what are the risks?
Investing in cryptocurrencies involves risks. When investing, the price depends on supply and demand. This is the case with stocks and cryptocurrencies. Yet there is a difference. If you buy a share, you become a small part-owner of a company. A share therefore represents a value. This is not the case with Bitcoin. Therefore, AFM prefers not to talk about investment, but rather about speculation.
Another risk of investing in cryptocurrencies is that there is little oversight in this market. More and more parties want rules for investing in cryptocurrencies. This is to better protect consumers. Due to insufficient supervision, many criminals and fraudsters are active in the crypto market. It just happens that a market or a party just disappears and then you lose all your money.
What other cryptocurrencies are there?
The first cryptocurrency was of course Bitcoin, but over the years more and more cryptocurrencies have been added. There are currently many hundreds that you can invest in. Many cryptocurrencies offer nothing new and are purely speculative, but there are also a few crypto projects that are very promising. We discuss the most important ones below:
Ethereum works a little differently than bitcoin. The Ethereum network acts as a backbone on which decentralized applications, so-called dApps, and smart contracts can work. To be able to make an application on the Ethereum network, you must have knowledge of programming. Ethereum has developed its own programming language called Solidity. Solidity makes it easier to program smart contracts and dApps.
Ripple focuses on solutions to streamline payments between banks. This also includes a cryptocurrency, XRP. The coin can be used on Ripple’s blockchain to make payments between banks even faster. Transactions on the Ripple blockchain are very fast. Where with Bitcoin it can take a few 10 minutes to process a transaction, with Ripple it only takes a few seconds.
Bitcoin and Ethereum use proof of work mechanism to verify transactions. This is based on complex mathematical equations. Cardano works on the basis of a proof of stake mechanism. This mechanism is more efficient and requires less energy.