Like all forms of currency, Bitcoin is given value by its users, supply and demand. As long as it maintains the attributes associated with money and there is demand for it, it will remain a means of exchange, a store of value, and another way for investors to speculate, regardless of its monetary value.
What is Bitcoin backed by?
Bitcoin and fiat currencies are not backed by any other asset. Currencies without backing can still maintain or increase in value.
Should Bitcoin be regarded as money?
Bitcoin can be in terms of liquidity equated to money on current accounts in banks, more precisely with regard to speed of the bitcoins transfers we can talk about a "virtual cash". Bitcoin can therefore be clearly included in M1, but no other bitcoin monetary aggregates exist.
Where does Bitcoin come from?
When computers on the network verify and process transactions, new bitcoins are created, or mined. These networked computers, or miners, process the transaction in exchange for a payment in Bitcoin. Bitcoin is powered by blockchain, which is the technology that powers many cryptocurrencies.
Is it smart to invest in Bitcoin?
But deciding if Bitcoin has a place in your portfolio requires looking beyond today's headlines. Bitcoin is a risky investment with high volatility, and should only be considered if you have a high risk tolerance, are in a strong financial position already and can afford to lose any money you invest in it.
What is causing Bitcoin to rise?
Bitcoin trading volume and transactions spike Bitcoin's dominance may have been fueled by the unexpected rise in inscriptions. The spike in transactions and increased exchange trading volume highlights renewed bullish optimism.