Despite how is now worth substantially more than when the initially attracted attention from investors, naysayers exist that assert it’s only a matter of time before it plummets to zero. Some of the associated myths are particularly pervasive. bitcoin cryptocurrency 1. Bitcoin Will Struggle to Remain the Dominant Currency Some analysts say that although bitcoin reigns supreme in the cryptocurrency market now, . They say that as more cryptocurrencies come on the scene, the likelihood rises that a better one will replace bitcoin, resulting in its plunge to zero. that won’t be the case forever Even people who aren’t very familiar with cryptocurrencies have heard of bitcoin. That kind of name recognition imparts trust, particularly among those who are ready to dip their toes in the market for the first time. Why That’s a Myth: Also, when asked how they’d invest $10,000 into cryptocurrencies, said bitcoin would be their option of choice, whereas the next most popular possibilities only received 12 percent of the total votes. That result doesn’t indicate a struggle ahead for bitcoin. 76 percent of millennials 2. Bitcoin Represents a Bubble That Will Burst Representatives from Capital Economics, a London-based economics research consultancy, are among those that at risk of bursting soon. They say it has “all the hallmarks of a classic speculative bubble,” and that people are buying it only because they expect it to rise in value. If so, a bursting bitcoin bubble could make the cryptocurrency’s value sink to zero. assert bitcoin is a bubble Various factors indicate bitcoin, and not just because investors have gotten themselves into frenzies over its soaring prices. For example, more merchants are accepting bitcoin as a kind of payment, while a growing number of nations view it as a legal tender currency. Why That’s a Myth: the world is increasingly accepting 3. Poor Economic Conditions Will End the Bitcoin Fad Some people , even going so far as to take out mortgages on their homes to purchase it or otherwise investing in ways they can’t afford. So, what if global economic conditions become so challenging that people can barely keep themselves fed, let alone invest in bitcoin? That’s an argument individuals might hear about why bitcoin’s price is headed for zero. bank their futures on Bitcoin Bitcoin arrived in 2009, and since then, the world’s economies have gone through their share of hard times. The cryptocurrency can handle those temporary slumps, just like . Why That’s a Myth: the collectible coin industry has done People also point out that bitcoin trends won’t necessarily move linearly to the economy. Depending on the circumstances of each crash or recession period, people may decide they’re putting flat currencies aside and want to invest in cryptocurrencies instead. That already occurred in . Bitcoin saw a popularity boost rather than going down. places like China and Cyprus 4. Excessive Energy Consumption Will Be Bitcoin’s Permanent Downfall Numerous news articles warn how bitcoin mining , sometimes as much as entire countries require for a year. The argument is that bitcoin is an extremely energy-intensive currency, making it unsustainable for widespread use, and the massive energy consumption means its value will eventually drop to zero when people realize how much it’s contributing to the Earth’s human-caused issues. uses enormous amounts of energy Research shows that bitcoin only uses one-eighth of the energy data centers use each year, making it than people think. Plus, several by looking at ways to tap into renewable resources. If people continue to be concerned about bitcoin’s energy consumption, this trend will continue. Why That’s a Myth: less draining on resources bitcoin mining companies are going green 5. Market Manipulation Will Lead to Artificially Inflated Prices Economist Nouriel Roubini warned that when some people in the market use tactics to prop up prices, and the bitcoin “whales” — those that possess huge amounts of the cryptocurrency — eventually dump their holdings and get out of the market. bitcoin would drop to zero Although there have been some cases of whales selling off large percentages of their holdings, there’s a growing trend of them deciding to . Why That’s a Myth: store their bitcoins in underground vaults One company in Hong Kong that offers such a service reportedly holds nearly $10 billion worth of bitcoin in its vaults. If whales were getting ready to sell, there’d be no reason for them to hold onto their wealth so tightly and fear theft. Besides, the U.S. Justice Department launched a in the bitcoin market. That investigation makes it harder for market manipulators to fly under the radar, reducing the chances they could pull off a stunt that causes bitcoin’s price to go to zero. probe of potential manipulative practices Keep Calm and Carry On It’s easy for people to get caught up in these pervasive myths and ultimately decide to sell their bitcoins or never invest in them at all. However, the accompanying information that debunks them emphasizes why investors should not get rattled by what they hear, but continue to assess various facets of the market when choosing how much or when to invest. Image by Pixabay
