Over the last week, there has been a massive surge in Bitcoin’s value, with the pioneer cryptocurrency rising above the $13,000 mark for the first time since the previous year. Due to this recent increase in its value, a lot of market watchers are now back to their old stance of Bitcoin being the currency of the future. In addition, as PayPal has announced that it will start offering support for crypto transactions, there are even higher expectations of Bitcoin dominance. Nonetheless, despite all positive news surrounding the leading crypto coin, there are some hints that indicate it still has a long way to go before it can achieve the kind of wide acceptance needed for toppling fiat currency.
PayPal is a notable player in the fiat currency market and it provides billions of people all over the globe with digital payment solutions. Renowned on Wall Street, Fidelity Investments has also made acquisitions of crypto investment products, and Square Inc. and MicroStrategy Inc. have also disclosed that they recently purchased Bitcoin. Regardless, despite all this hype, Bitcoin and other virtual assets still have a long way to cover before they can even think about replacing fiat currencies. In most cases, the purchasing power of most cryptocurrencies remains flimsy and quite rudimentary.
Despite the positive trends seen in Bitcoin, it hasn’t experienced wide acceptance. Some critics were of the opinion that rather than trying to replace fiat currencies, these virtual currencies are metamorphosing into a completely different asset class, such as gold. In fact, there is also proof that a lot of financial companies are interested in investing in the crypto market as institutional. Meltem Deminors, CoinShares’ chief strategy officer also expressed his opinion about Bitcoin and its institutional acceptance. He stated that even though most traditional investors wouldn’t see it that way, but the influx of institutional investors in the crypto market would certainly work in favor of Bitcoin.
For a lot of people, the sudden surge in Bitcoin’s value recently is very similar to what had happened a few years ago, when Bitcoin had hit the $20,000 resistant level before it crashed down again in a few weeks. This time around, some people are hoping that it will reach the same level, but some are quite skeptical because the crypto has been struggling for quite a while now and so, they have opted to be more reserved in their investment decisions.
The top supporters of Bitcoin and crypto in general have predicted that it will achieve mainstream adoption, but this hasn’t materialized as yet. One of the primary reasons behind it is the volatile nature of the crypto market that causes prices to fluctuate quickly, along with the frequent scams and hacks that are related to crypto coins. Hence, before Bitcoin and other cryptocurrencies can even think of achieving greater acceptance, they need to address these issues. While it is used as a speculative currency, its volatility and ability to use are the major issues. However, Meltem did say that there has been some improvement in this regard.