Can Bitcoin and Cryptocurrency Become More Than an Asset?
While Bitcoin and other cryptocurrencies have experienced slight setbacks over the last two weeks, the industry as a whole has been booming alongside other technology equities over the past year. Bitcoin continues to hover around $50,000, while other popular coins like Ethereum and Stellar have seen similar enormous growth.
Cryptocurrency exchanges are booming as a result of quickly growing prices. Multitudes of new exchange websites and apps have sprouted up over the last couple of years hoping to capitalize on the growth of cryptocurrency, with some exchanges now managing the equivalent of billions of dollars in assets.
The largest global cryptocurrency exchange is Binance, and as of February 11, the company has roughly $30.5 billion in assets trading on its platform. Founded in 2017 with headquarters in Malta, Binance has built a reputation as a trustworthy trading platform with hundreds of different cryptocurrencies available for trade. The company also recently acquired the largest cryptocurrency exchange in India, WazirX, for around $10 million.
Other notable cryptocurrency exchanges have billions in trade volume but fall well short of Binance’s dominance. These include HBTC (previously known as BHEX) with $12.6 billion in trading volume, Dsdaq with $10.8 billion and Hydax with $10.7 billion.
This massive jump in cryptocurrency valuation has led many to speculate the entire industry will reach over $1 trillion in the near future. While exchanges are facilitating a large portion of this growth, blockchain companies, cryptocurrency miners, ETFs and other businesses are also making a strong case for high growth in the industry.
Many other analysts, however, are certain that cryptocurrency is in an enormous bubble. With bitcoin surging past $50,000, some are questioning the short-term usefulness of the digital currency compared to fiat currencies like the U.S. dollar and others.
Evidence of cryptocurrency as a bubble could be partially expressed by the distribution of bitcoin ATMs throughout the world. Like regular ATMs, Bitcoin ATMs offer easy physical ways to purchase bitcoin with a regular debit or credit card without connecting that Bitcoin to a bank. With the proper bitcoin wallet code, these ATMs transfer fiat currency from a credit card and translate it to a personal bitcoin wallet.
With the surge in bitcoin prices and number of people owning bitcoin in the U.S., these ATMs have become increasingly popular throughout all parts of the country. In data collected by Coin ATM Radar, there are over 11,000 bitcoin ATMs across the U.S. as of January this year. While that’s an excellent sign for the cryptocurrency industry in North America, data on Bitcoin ATMs in other places of the world paint a much different picture. The second-highest number of Bitcoin ATMs in a country is north of the U.S., with just 1,000 in Canada. After that, countries in Europe round out the top 10 with less than 100 Bitcoin ATMs in each.
This could be a sign that the cryptocurrency industry is largely being propelled by investors in the U.S. and isn’t necessarily catching momentum worldwide. That’s a problem for Bitcoin and cryptocurrency, since the idea of both is for a global, decentralized currency option easily available to anyone around the world.
Ultimately, cryptocurrencies like Bitcoin still have a long way to go to prove their worth compared to fiat currencies for many people. Most people—particularly in the U.S.—are still treating cryptocurrency as an investment asset rather than a new paradigm in currency, in large part because they themselves still find it much easier and faster to use traditional currencies. Whether Bitcoin truly is in a bubble really depends on it continuing to break free from the chains of being just another form of high-risk investment for people across the world.
This article originally appeared on msn.com To read the full article and see the images, click here.
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