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Hi Academia,

Bitcoin recently climbs its values so significantly since last year 2022. This could be bringing positive energy for investors whom must have gone throgh good and bad situation on Bitcoins investments .

As all are well noted that Bitcoin has experienced significant fluctuations in value throughout its history. In late 2017 and early 2018, Bitcoin reached an all-time high of nearly $20,000 per coin, however only to drop down to below $4,000 by the end of 2018. This was due to a combination of factors, including increased regulatory scrutiny, hacking incidents, and the emergence of competing cryptocurrencies. This was a significant loss for investors who had put their money into Bitcoin when it was at its peak.

Bitcoin is a decentralized digital currency that operates on a peer-to-peer network. It was created in 2009 by an unknown person or group using the pseudonym Satoshi Nakamoto. Bitcoin has disrupted the traditional financial system by providing an alternative means of payment and store of value.

In the early days of Bitcoin, it was predominantly used by tech enthusiasts and libertarian-minded individuals who were skeptical of centralized financial systems. However, as the number of merchants accepting Bitcoin grew and its price surged, it gained mainstream attention.

Bitcoin’s success was primarily due to its decentralized nature, which meant that it was not controlled by any government or financial institution. Additionally, its blockchain technology made transactions secure and transparent.

Despite its ups and downs, Bitcoin has had a significant impact on the financial system. It has challenged the traditional banking system and forced central banks to consider the potential of digital currencies. Additionally, blockchain technology has been adopted by many industries beyond just finance.

Going back to Bitcoin bouncing back from market downturns, there are several factors that suggest it will do so again.

Firstly, Bitcoin has a limited supply.

Economic Theory of scarcity. The total number of Bitcoins that will ever exist is capped at 21 million, and as of 2021, approximately 18.6 million have already been mined. This means that there is a finite amount of Bitcoin available, which creates scarcity and can drive up its value. Additionally, the rate at which new Bitcoins are mined is slowly decreasing, which means that it will become increasingly difficult to obtain them over time. This may also contribute to an increase in demand and price.

Secondly, there is growing institutional interest in Bitcoin.

Major companies such as Tesla, MicroStrategy, and Square have made significant investments in Bitcoin, and more traditional financial institutions are starting to offer Bitcoin-related products and services. This suggests that Bitcoin is becoming more mainstream, which could lead to an increase in demand and price.

Thirdly, there is a growing understanding of Bitcoin’s potential as a store of value and hedge against inflation.

As governments around the world continue to print money to stimulate their economies, there are concerns that this could lead to inflation and a decrease in the purchasing power of fiat currencies. Bitcoin, with its limited supply and decentralized nature, has been touted as a potential hedge against this type of inflation.

Finally, there are ongoing developments in the Bitcoin ecosystem that could contribute to its rebound.

For example, the Lightning Network is a layer-two solution that aims to increase Bitcoin’s scalability and transaction speed. This could make Bitcoin more practical for day-to-day transactions and increase its utility, which could drive up demand and price.

In short while Bitcoin has experienced significant losses in value in the past, there are several factors that suggest it will rebound in the future. Its limited supply, growing institutional interest, potential as a hedge against inflation, and ongoing developments in the Bitcoin ecosystem all point to a potentially bright future for the digital currency. However, it is important to note that investing in Bitcoin is still highly speculative and involves significant risk.

Good luck Investors


Salam Sehat Semangat Sukses

Bambang Purnomo , SS-BA, CSCA, CAVM Solution Consultant

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