Bitcoin prices continue to hit fresh all-time highs, and after rising more than 424% in 2017, the digital currency has caught the attention of main street. The goal of digital currency operators is to have their crypto currency used as a way to trade goods and services, but replacing sovereign currency’s is a long way off. In the last few months, Chinese regulators have banned exchanges and the SEC in the United States has failed to give its blessing to crypto currency assets.
What Are Digital Currencies
A cryptocurrency is a digital currency, and works the same way a regular currency would work. The difference is that it would be universal, and would not require that you change currencies when you enter a different country. You would be able to purchase goods and services, and exchange the currency back into a countries currency with ease if needed. The most liquid digital currency is bitcoin which is actively traded on cash exchanges as well as in securities format outside of the United States.
One of the benefits to owners of cryptocurrencies is that it cannot be manipulated by a central bank or monetary authority. So, while the ECB can authorize the creation of billions of Euros at any time, there is only a finite amount of digital currency.
For example, Bitcoin has a maximum limit of 21-billion. The supply is limited, and even more so when country such as China ban exchanges and the introduction of new digital currencies in initial coin offering. A limited supply met by increasing demand will continue to push the value of bitcoin higher.
Struggling with Acceptance
The SEC, the U.S. Securities and Exchange Commission has yet to grant trading authority to applicants who want to start a digital currency exchange. This would also include Bitcoin securities that purchase bitcoin and allow investors to benefit from a higher exchange rate. With the U.S. and China the world’s first and second largest economies, sitting on the sidelines, its will continue to be a struggle for bitcoin to gain widespread acceptance. Additionally, Jamie Dimon, the CEO of JP Morgan Chase, said that he believed bitcoin was a fraud. Dimon said “he would terminate any employee who traded crypto currencies”.
Why is Bitcoin Gaining Attention?
Bitcoin allows investors or consumers around the globe who do not trust their currency to purchase a currency that will not get devalued. Instead of trying to purchase dollars or gold, your bitcoin can be used as a payment worldwide. You can see the value of bitcoin by looking through iforex crypto currencies.
Where is Bitcoin Trading
Bitcoin is trading through exchanges that provide access to digital currencies. Coinbase is the most popular but there are many new exchanges releasing digital currencies daily. Coinbase is an app that you can download on your phone which generates a link between a bank account or credit card and digital currency.
Bitcoin and cryptocurrencies are having gain worldwide exposure but without acceptance into the United States and China, it will be hard for these currencies to remain relevant.