What the heck happened to Bitcoin?
I remember in 2012 when Bitcoin was all the rage. The idea of having a digital decentralised currency that was designed to be independent of the international banking system and developed with transaction security in mind was very compelling.
Ever since its launch in 2009, there were people saying that Bitcoin and cryptocurrency in general was the future of international currency and it seemed that everybody was trying to get onto it.
From the start pundits and experts were debating whether Bitcoin was worth investing in due to its novelty with esteemed financial publications such as Forbes and Bloomberg reaching differing conclusions.
Despite my brother and I not having access to state-of-the-art hardware, we tried mining Bitcoins using my brother’s laptop. We managed to mine one eighth of a Bitcoin before the laptop crashed.
Following the example of Bitcoin, other cryptocurrencies such as Ethereum also starred gaining widespread popularity. As the value of Bitcoin continued to increase, my brother and I felt very bad about not being able to get on the cryptocurrency bandwagon earlier.
Recently though, the buzz around Bitcoin and cryptocurrencies seems to have died down and people’s minds have drifted towards things like AI and self-driving vehicles.
Before November 2021 when Bitcoin reached its peak value of over $65,000, its value would continuously crash and then boom leading many people to predict that Bitcoin’s value would continue to go in an upward direction.
Worryingly one of the reasons for Bitcoin’s tremendous rise in value was hype and overconfidence.
Despite initial promising signs of widespread adoption, peoples’ confidence in Bitcoin’s performance began to wane.
Although a few countries such as El Salvador adopted Bitcoin as legal tender, many others, most notably China, began actively banning the use of Bitcoin because of concerns about money laundering and the environmental effects of Bitcoin mining.
The controversy surrounding the bankruptcy of FTX in November 2022 in the midst of its founder and former CEO Sam Bankman-Fried standing trial for fraud led to a further loss of confidence in the viability of Bitcoin as a reliable investment option.
Bitcoin came to be viewed as a volatile investment and investors shifted to more sure investments during a time of worldwide financial uncertainty. In fact Bitcoin lost more than 60% of its value during 2022.
Perhaps there is still hope for Bitcoin in the future, but for now it looks like its heyday has passed. It’s just a shame that my brother and I were not able to get in on the trend while it was still hot.
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References
https://www.jmco.com/articles/tax/brief-history-bitcoin/#:~:text=Bitcoin%20was%20first%20introduced%20in,and%20recorded%20on%20a%20blockchain.
https://money.usnews.com/investing/articles/the-history-of-bitcoin
https://www.thetimes.co.uk/money-mentor/article/is-bitcoin-crash-coming/
https://www.investopedia.com/what-went-wrong-with-ftx-6828447
https://www.google.com/amp/s/fortune.com/2022/01/04/crypto-banned-china-other-countries/amp/
https://www.google.com/amp/s/www.cnbc.com/amp/2022/12/23/bitcoin-lost-over-60-percent-of-its-value-in-2022.html
