Bitcoin, the first ever cryptocurrency launched in 2009, and the jury is still divided whether it is digital gold or a risky investment
After a turbulent journey, the virtual currency turned fifteen in January 2024.
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For some, Bitcoin is a risky bet, and for others, it’s digital gold. While billionaires like Bill Gates and Warren Buffet have been vocal critics, businesspersons Elon Musk and Mark Cuban have backed it. Somewhere in between, the price of the first-ever cryptocurrency has risen from fractions of a penny in 2010 to an all-time high of $73,000 in 2024.
The possibility of upending the existing financial system has sparked interest and controversy. Bitcoin came into being in 2009, amid a global financial crisis, after its purported creator, Satoshi Nakamoto [pseudonym], published a white paper on this new currency that doesn’t need the intervention of a formal bank. Unlike fiat currency, bitcoin is created, distributed, traded, and stored using a decentralised ledger system known as a blockchain.
Its design as a peer-to-peer cash system is intended to function as a currency with stability corresponding to that of fiat currencies, but reportedly, bitcoin’s volatility is almost ten times higher than that of major exchange rates. This makes it a less preferred medium of investment.
After a turbulent journey, the virtual currency turned fifteen in January 2024. The speculated asset also got a major boost after the US regulator, the Securities and Exchange Commission (SEC), approved bitcoin exchange-traded funds (ETFs) on stock markets, adding that it remained sceptical about cryptocurrencies. Nevertheless, this was a landmark moment for the sunrise market.
The SEC authorised 11 ETFs for Bitcoin in the US, opening the door to cryptocurrencies for many new investors who are usually reluctant to take the extra steps involved in buying bitcoins. The largest cryptocurrency by market value has gained 50 percent this year.