Could Bitcoins Become Worthless? – An End to Bitcoin Hype
The most critical question in the world of the cryptocurrencies – Could Bitcoins Become Worthless? Bitcoin has long been the most popular and sought after cryptocurrency on the market. A rapid price development and worldwide media attention have contributed to this.
Everyone, whether a major investor or a small retail investor, wanted to share in the hype. Now, Bitcoin is the oldest cryptocurrency and has numerous market highs and lows behind it – for some, however, the lows are the reason for questioning whether Bitcoins could become worthless.
The existence of other cryptocurrencies also raises this question. Initial coin offerings (ICOs) ensure that new currencies see the light of the crypto world again and again. Investors now have access to a wide range of coins in which to invest money.
The bottom line is always about profit – everyone wants to go home with a profit. The fear of anyone who currently owns Bitcoins is therefore justified. If Bitcoins become worthless, the entire investment was in vain. In this case, the worthlessness of Bitcoin would affect both Bitcoin buyers and Bitcoin mining providers or investors.
It should be remembered that Bitcoin is not regulated nor supported by banks. Its value results solely from market demand.
Could Bitcoins Become Worthless? – Market Capitalization and Conditions
In order to answer this burning question, one must examine the market more closely. Blockchain technology is indeed anonymous and therefore leaves little to the owners of Bitcoins. However, there are persistent rumours that the market capitalization of Bitcoin is firmly in the hands of large companies.
In this case, 90 percent of the total number of Bitcoins should be owned by financial giants – large investors and companies, such as Amazon and Google. The remainder is distributed among small investors who cannot compete with the financial power of the big ones.
If this assumption proves true, it may be difficult to make Bitcoin worthless because the big investors will do everything in their power to prevent such a development.
In addition, in the media, the Bitcoin cryptocurrency is often referred to as digital gold. In order to take away this property, another cryptocurrency would initially have to be similarly successful and dethrone Bitcoin.
Yet, gold has not been displaced as the most important precious metal. As a means of payment, Bitcoin is not competitive, but more closely resembles gold. With this in mind, whether Bitcoin could ever be worthless is questionable.
Could Bitcoins Become Worthless? – Possible Scenarios
There are certainly scenarios in which Bitcoin could completely lose value.
Most likely, many other cryptocurrencies will gain in value so much in the future that Bitcoin will be forgotten. This is close because there are already some coins that are much more practical. They work with other technologies and are used in everyday life, i.e., as a means of payment that is superior to Bitcoins.
One must not forget that the Bitcoin is so popular only because it is the best-known cryptocurrency. However, its pioneering role does not guarantee that its value will be permanently preserved.
Furthermore, it is conceivable that Bitcoin could be “”broken down””. This means that states and governments are cracking down and putting cryptocurrencies in their place. Three-digit price gains are then over and investors and potential new buyers lose interest.
In any case, states are considering introducing their own cryptocurrencies as their national currency. Thus, Bitcoin would be eliminated as a world currency. And even now, some initial coin offerings of new cryptocurrencies seem more profitable than Bitcoin investment.
A third possibility is technical weaknesses or deficiencies that could occur in the future. Failure to update, network congestion, or similar factors could cause the Bitcoin to become worthless with a repeated occurrence.
The question of security is permanently present in the minds of investors and the desire for stability is great. If this cannot be provided by a cryptocurrency, it may eventually not be worth much, despite its pioneering role.
Could Bitcoins Become Worthless? – Conclusion
Bitcoin is still considered the most popular of all cryptocurrencies. Much would have to happen to displace it from its pioneering role in the marketplace. It is important to know that most of the market capitalization is in the hands of powerful investors. Nevertheless, the scenario of complete worthlessness is not inconceivable, as the value is determined solely by demand.
Things like government regulation or the rise of other cryptocurrencies can have a massive impact on performance.
In addition, there are many other cryptocurrencies that could overtake Bitcoin. Technical problems should also be considered as possible triggers of a loss of value. Time will tell if Bitcoin can assert itself as digital gold in the future or fall by the wayside.
Alexander Weipprecht is the managing partner of Provimedia GmbH. As a trained IT specialist for application development, he has been advising leading companies on the following topics for more than 10 years: online marketing, SEO and software. Cryptocurrency is becoming increasingly important to businesses and investors. Through Coin Report and Krypto Magazin Germany, Alexander wants to give all people easy access to the subject matter.