In recent years, Bitcoin has started to become very popular among investors and savers of all sizes. The exponential growth of its value in a short time and the inflation of the US dollar are some of the reasons why many have decided to bet on this digital currency.
Although the volatility of the cryptocurrency market still scares many investors who do not want to risk their money, the truth is that Bitcoin has a daily transaction volume of almost 25 billion dollars. This clearly shows the massiveness of its reach.
Dollar, inflation and Bitcoins
Without a doubt, one of the economic factors that has most concerned the US in recent years is inflation. The loss of purchasing power of the dollar has been an incredible 85% if compared to the same 50 years ago.
On the other hand, the value of Bitcoin has multiplied several times in a very short time, which makes it a much more profitable alternative to saving in dollars.
According to data from a Finbold Report, the amount of Bitcoin that can be purchased with one dollar has decreased by 75.23% between February 2020 and February 2022.
This is the case even if we take into account the periods of high volatility that usually affect the market. On a larger time scale (2 years, for example) we see an increase in the price of Bitcoin of around 300%.
¿Why is Bitcoin so popular?
As we have mentioned, Bitcoin has become a valuable backing against inflation. Some of the factors that make BTC such a popular asset are the ease of access and the ability to adapt to any budget.
Although, at the time of writing, the price of Bitcoin is around $43,000, it is possible to buy infinitesimally small pieces (known as satoshis). This allows any saver to hold BTC regardless of the size of their wallet.
Inflation in the United States was 7.5% between January 2021 and the same month of this 2022. This clear loss of the currency’s value forces people to seek refuge in other assets so as not to suffer the effects on their pockets.
In this sense, Bitcoin seems to be a valid alternative if we take into account the long-term data. However, it is always necessary to keep in mind that the cryptocurrency market is extremely volatile and large losses (or gains) can be recorded in short periods of time.
