With people using it as both, it’s hard to tell exactly whether it is one or the other. Here we discuss each of the main arguments for each of its usage types.
Photo by Muhammad Asyfaul on Unsplash
At the time of this writing and in dollar terms, the current value of Bitcoin is USD 22,945.71 per BTC. This value is determined by the supply and demand of Bitcoin, as well as its role as a store of value similar to gold.
In the past few months, Bitcoin’s price has hovered around $19,000 to $20,000, and some not-too-conservative predictions say it could reach $100,000 by 2023. More bullish crypto enthusiasts say that $250,000 isn’t far from sight. If Bitcoin were to achieve 15% of the global currency market’s valuation, its market capitalization would be approximately $3 trillion.
However, people should be cautious when investing in volatile assets such as Bitcoin or other cryptocurrencies.
So, a currency or an investment asset?
Bitcoin is both a currency and an investment — as many currencies are also investments depending on your specific situation or needs.
As a currency, Bitcoin is a digital asset designed to act as money and a form of payment outside the control of any one person, group, or entity.
It has value because it is scarce and can be used to purchase goods and services. However, due to its significant volatility, it is unable to hold a stable value as a typical fiat currency would. Nonetheless, people use it regularly for cross-border payments or just to make transfers outside of the regular banking system.
There are already Real Estate Agencies offering properties valued in BTC and accepting Bitcoin for a transaction. Due to the surveillance and paperwork required to use the traditional US Dollar for large amounts, it can also be cheaper to use Bitcoin instead of sending checks or international bank transactions.
As an investment, Bitcoin can be bought and sold in exchange for other currencies or assets, with investors hoping its value will increase over time. Whether Bitcoin is a good investment depends on the individual investor’s risk tolerance and goals.
As an investment, Bitcoin is usually a good investment similar to other currencies such as the US Dollar or the Euro in countries with lower currency value such as the Argentinian Peso — or the Paraguayan Guarani in my country.
If you also consider that these days it has some correlation with the main stock market indexes, it is a good alternative for people who need easy access to stock market investments.
For people wanting to invest for the long term but don’t have access to or are banned from the banking system for different reasons, it is a real alternative to keep their money safe.
Can we have a verdict?
Bitcoin usage can depend on personal needs. But the truth is that it’s been already more than ten years since its existence and it has not gone away. So, that gives you something to think about and you can use it as both: a currency and an investment.