Can you make money with Bitcoin?
Over the past 6 months we have seen the price rise from $20 per coin in February to $260 per coin in April, fall back to $60 in March and return to $130 in May. The price has now stabilized at around $100 per bitcoin, but what will happen next is anyone’s guess.
The future of Bitcoin ultimately depends on two main variables: its acceptance by the general public as a currency and the lack of government intervention.
The Bitcoin community is developing rapidly, interest in cryptocurrencies is rapidly spreading online and new services are accepting more and more Bitcoin payments. Blog giant WordPress accepts Bitcoin payments and African mobile application provider Kipochi has developed a Bitcoin wallet that allows Bitcoin payments on mobile phones in developing countries.
We have seen people make millions of dollars with this currency. We have seen more and more people trying to live on Bitcoin alone for months in a row while capturing the experience of watching a documentary.
You can use Bitcoin to buy takeaways in Boston, buy coffee in London, or even buy a few cars on Craigslist. Searches for Bitcoin skyrocketed in 2013, soared in April and then Bitcoin’s price fell. Last week, an anonymous buyer made the first major Bitcoin company acquisition for the online gambling site SatoshiDice for 126,315 Bitcoins (about US$11.47 million).
If confidence in the currency remains strong, this rapid increase in awareness and absorption looks set to continue. This leads to the second dependency. Government regulations.
While it is specifically designed to operate independently of government control, Bitcoin will inevitably be influenced by the government in one way or another. This must be for two reasons.
First, to achieve a high level of adoption, Bitcoin needs to be usable by a large number of people, meaning we move beyond the realm of hidden transactions and extend to the everyday transactions of individuals and businesses. Second, these Bitcoin transactions can become a traceable part of people’s taxable wealth, which can be declared and regulated along with any other type of wealth.
The European Union has announced that Bitcoin is not classified as legal tender or currency, so it will not be regulated on its own. In the United States, the 50-state system and number of bureaucracies involved inevitably complicate decision-making, and no consensus has been reached so far. Bitcoin itself is not considered a currency, but an act of currency.
The current future of the booming Bitcoin market in the United States is even more uncertain. Any decisive legislation in the United States could have a very positive or very negative impact on Bitcoin’s future.
So, should you buy Bitcoin?
The answer mainly depends on your degree of risk aversion. Bitcoin will certainly not be a smooth investment, but the potential of this coin is huge.