Forex – CFD Weekly Microanalysis - Bitcoin

An investment of approximately 1000 dollars in 2012 would be worth over 4.5 million dollars now. Besides Bitcoin, there are over a thousand cryptocurrencies. The most important ones are Ethereum, Litecoin, Dash, etc. The biggest advantage of cryptocurrencies is their independence from central banks. Uncertainty of monetary policies, high inflation, money printing, the risk of theft and similar problems do not relate to cryptocurrencies. Bitcoin makers are all miners who mine and process its algorithm. Unlike traditional currencies, Bitcoin cannot experience negative effects of inflation because the number of Bitcoins is limited to 21 million pieces. Recently, even MMF made positive comments with regards to the idea and functionality of cryptocurrencies. However, there are some disadvantages in general related to abuse in the on-line world.

Currently, the main risk for cryptocurrencies is the compromising effect of numerous abuses during the creation of new cryptocurrencies which creates a negative spill over effect on other cryptocurrencies. Of course, negative effects of this kind are weaker for the most prominent cryptocurrencies. Another risk is the regulatory risk, in other words, the uncertainty related to potential attitude of major financial regulatory bodies worldwide toward cryptocurrencies and, consequently, Bitcoin. Recently, China took an extremely harsh stance toward cryptocurrencies. However, even if part of the bitcoin network crashes, monetary transaction will continue to flow in the parts that function normally. In Japan and South Korea, they can be used for payment of almost all goods and services - gasoline, electricity, products from different vending machines and even for term deposits in Bitcoins. Although Bitcoin is incomprehensible to the majority of the population with regards to core value and the way it functions, more and more people are coming to realize its value and potential.

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