Well, well, so you want to know the reason behind the popularity of cryptocurrencies. If indeed, then I assure you have come to the right place. If you have been following the bitcoin coin magazine lately, you probably already know about your interest in cryptocurrencies, Bitcoins in particular.
This article will tell you everything you need to know from the A to the Z of cryptocurrencies. If you want to know why cryptocurrencies are so popular, keep reading. I am a crypto investor myself, and I have been investing in all sorts of cryptos for the last eight months.
So whatever information about cryptocurrencies I will be giving you in this article is based on first-hand investing experience. After reading this article, you will get the answer to why cryptocurrencies are so popular, especially in 2021.
So without wasting any more time, let us take a look at all the nitty-gritty of cryptocurrencies.
What Are Cryptocurrencies?
Cryptocurrencies are decentralized cryptographic digital currencies that can be used for trading, transacting, and inventions. There are many cryptocurrencies in circulation; Bitcoin is the most famous among them.
There are other cryptocurrencies as well, such as Ether, Tether, Litecoins, etc.
The total number of cryptocurrencies in circulation is 6,700. Some of the most popular and their market capital values are given below.
Cryptocurrencies Market Capital Value
- Bitcoins (BTC) $726,946,972,207
- Ethereum (ETH) $186,975,099,458
- Tether (USDT) $28,786,836,661
- Litecoin (LTC) $10,007,391,743
- XRP $19,129,891,590
Cryptocurrencies work on Blockchain technology, which uses the distributed public ledger concept for recording and storing transactions.
Why Are Cryptocurrencies So Popular In 2021?
There are numerous reasons that can be attributed to the popularity of Bitcoins in 2021.
1. Bull Run Amid COVID
Cryptocurrencies, Bitcoins, in particular, have had a bull run during the COVID-19 pandemic situation. But hold your horses; the beginning of the success story of Bitcoins amid COVID is not as half as pleasant. When the Government imposed nationwide lockdown was announced in March, Bitcoin investors panicked as they thought the time of Bitcoins was over.
During those default times, they started selling off their Bitcoins, which led to a severe market crash, and the price of one Bitcoin fell as low as $3,000. But the big whales in the crypto market saw this as an opportunity and held on to their Bitcoins. The big whales took a step further and started buying more Bitcoins since the prices were low.
Soon the small-time investors joined the trend and created a bullish market. This led to a huge surge in the price of Bitcoins, and since then, Bitcoins have not looked back. The price of Bitcoins has always been above $30k since then. Even at the time of writing this article, the price of one Bitcoin is a whopping $39,036.10. This is the main reason why are Cryptocurrencies so popular.
2. Inflation Proof
The most common way to acquire a cryptocurrency is to mine it. All Cryptocurrencies are inflation-proof since there is a limited number of cryptocurrencies that can be mined. Cryptocurrencies will always be a scarce digital asset. This is why it is deflationary in nature.
The price of Cryptocurrencies is only going to go up. Financial experts have already predicted that the price of Bitcoins is going to hit $100k by the end of 2021. This is the main reason why are Cryptocurrencies so popular.
With each passing day, more investors are investing heavily in cryptocurrencies as they want to escape the inflation that fiat currencies have.
3. Substitute to Fiat Currencies
Cryptocurrencies are expected to work as a substitute for Bitcoins in the near future in most parts of the world. Cryptocurrencies are already legal in highly developed nations like Japan, The United States of America, South Korea, Australia, etc.
Governments of the countries in which cryptocurrencies were illegal have started to realize the potential of Cryptocurrencies and the many benefits of Blockchain technology. They have started legalizing Cryptocurrencies for trading and investing, and by the end of 2021, some of them will even legalize Cryptocurrencies as an alternative to their respective fiat currencies.
4. Very Little to no Processing Fee
Cryptocurrencies take very little to no processing fee for cross border transactions. It is quite unlike when you compare it to the conventional banking system. People have already lost their faith in the banking system due to their huge processing fee for cross border transactions and the amount of time it takes.
When people send money across the border, a hefty amount of processing fee is imposed on the money they are transferring. Add to that the amount of time it takes for the receiver to receive the money. Transactions in Cryptocurrencies take up to 10 minutes, and moreover, there are no cross-border processing fees.
This is a very important reason why are Cryptocurrencies so popular.
5. Best Digital Payment Method
When the COVID-19 pandemic first hit in 2020. Governments of most countries were condoning the use of digital payment methods as using cash would not help coronavirus stop spreading. Cryptocurrencies facilitate Digital Payments to a large extent.
Firstly, all cryptocurrencies are decentralized, which means there is no legal body regulating them. This effectively means that a person who transacts in Cryptocurrencies is not obliged to show an account of his/her transactions to any legal body.
There are no intermediaries in between to intervene. All the digital payments are between the buyer and seller, and that’s not the end of it. It is a peer to peer encrypted which makes sure that all transactions are secure.
6. Elon Musk’s Twitter Bio
Elon Musk’s stance on Bitcoins has been quite controversial. He had been very vocal about the use of Cryptocurrencies, his Bitcoin holding, and the advantages of Blockchain technology.
Recently when Bitcoins hit an all-time high, he changed his Twitter Bio with the Bitcoin logo. This made people think he supports Bitcoins, and this move generated a bullish trend in the crypto market. This is the reason why Cryptocurrencies are so popular in 2021.
There you go; I hope you have now learned why are cryptocurrencies so popular. The popularity of cryptocurrencies, especially Bitcoins, is only going to go up from here. The trend of investing in Bitcoins has never been more alive.