Whatever happens, crypto enthusiasts are not losing faith in Bitcoin (BTC) because of its crypto regulation. One of the reasons could be that it has been around for so long. After all, it was the first crypto to enter the virtual world. However, its ability to rise again after every fall, could be a better reason! It suffered volatility in 2021, but has come back all that much stronger in 2022.
Around March 22, 2022, BTC’s pricing had gone below $45,000. This created fears about it facing a bearish run. By the end of the month, however, it made an entry into a correction zone. Its price went beyond $48,000.
Has it remained steady at the same cost, after that?
No, it has not, for it faced price fluctuations after that. Nonetheless, it has managed to remain above $45,000 in April 2022. Therefore, it has managed to recover from all the pullbacks it has been experiencing since January 2022. In fact, Bitcoin seems to have traversed the support-and-resistance zone quite well, thus far.
Obviously, many investors are holding onto their wallets filled with Bitcoin, confident that it will always come back stronger than ever. After all, the latest uptick has managed to push BTC back to above its 50-day moving average. Even its relative strength index (RSI) is beyond mid-level. Thus, BTC is under significant purchasing pressure.
Why Bitcoin Will Sustain
There are several reasons why Bitcoin will continue to hold its own, despite everything that skeptics say.
BTC Possesses Value
The Bitcoin network is decentralized, with independent nodes on display. It initiates consensus-based transactions, without the entry of governmental authorities or a system of intermediary banks. In other words, third-party interference is not possible at all.
This may create fears about what would happen if something goes awry.
However, the blockchain has taken care to ensure that every transaction is verified and securely recorded on a ledger. The recording is immutable. Therefore, there can be no counterfeiting, manipulation, or theft. There is no chance of double spending either. Here, the user spends/transfers the same BTC in separate settings/dealings, leading to the creation of a duplicate record.
Thus, Bitcoin displays its worth in several ways.
Scarcity Ups its Price
There is a market cap on BTC’s supply. Therefore, it does not seem sufficient to meet the ever-increasing demand. World over, there is a clamor for Bitcoin from both, beginners, and experienced investors. This, even though numerous other cryptocurrencies have entered the world of virtual currencies.
As people express a desire to own even a minute share of the pie, the pricing of Bitcoin escalates. Surprisingly, many investors are ready to pay the cost, too. They have immense faith in the crypto’s potential to provide gains.
Then again, the Bitcoin blockchain is highly useful as a payment system across the globe. With an ongoing pandemic and the Russia-Ukraine war on display, it helps that Bitcoin’s most famous use case is ‘remittance’. Furthermore, the remittances may take place across borders, speedily, and at affordable costs.
Nations, such as El Salvador, are even proclaiming that Bitcoin’s advanced technology might enable it to become a medium for daily transactions.
Production Costs are Heavy
Bitcoin miners pay heavily for advanced computing resources and electricity. In turn, they must also be paid well for resolving complex algorithms and discovering new blocks.
Since the cryptocurrency marketplace is heavily competitive, BTC is bound to keep its price competitive too. After all, it must recover production expenses. Thus, the pricing of Bitcoin moves in alignment with cost of production.
BTC has Utility
The Bitcoin blockchain employs good security measures. Any cybercriminal, attempting to attack the Bitcoin ledger, would have to use a large amount of money, effort, and computing power. Furthermore, once the transactions have undergone recording, it is impossible to modify them, or tamper with them. Therefore, the blockchain provides assurance against online crimes.
Then again, BTC has the capacity to undergo multiple divisions, in comparison to fiat currencies. It is possible to divide it up to eight decimal places. The constituent units are titled, satoshis. Fiat currencies generally do not go beyond two decimal places. The advantage of BTC’s multiple divisions is that, even a fraction of ownership should fetch the investor healthy rewards.