Cryptocurrency is relatively a new form of currency that is designed to work as a medium of exchange in a digital or virtual manner. Cryptocurrency is gradually penetrating its way in to the market and different merchants might start accepting Bitcoin or other form of digital currencies as a mode of payment. Bitify and OpenBazaar are two examples of market places that are now accepting cryptocurrencies. However, as cryptocurrency is getting famous a lot of new digital currencies are being introduced in the market for example Litecoin, Bitcoin, Ethereum, Zcash, Dash. Ripple, Monero etc.
Out of all these currencies, Bitcoin was the first that was introduced in 2009. It is a form of electronic cash that can be sent from one user to another without any middle-man. However, that is something extremely common between the different types of cryptocurrencies that exist. What makes Bitcoin the best out of them is that it is the most stable currency according to the billionaire investor, Bill Miller. Bill Miller in an interview stated:
I think that it’s an interesting technological experiment. Every day that it doesn’t blow up or get regulated to zero, what’s going to happen is that more money flows into the ecosystem.
According to him, the entry of digital currencies into the world of exchange and transactions is a phase of evolution. However for him, majority of the cryptocurrencies that are newly entering the market, are worthless. He believes that Bitcoin is the only currency that has the highest chance of being successful. Bill Miller further stated in his interview:
Most of them [cryptocurrencies] are probably worthless. Bitcoin is the most stable of the currencies. I think it has the greatest probability of being successful. There are others that people like, but that’s the only one I’m interested in.
Furthermore, earlier a report was published in Forbes that was based on a survey. The survey showed that Bitcoin as compared to other digital currencies has more potential in terms of increase in prices. The reason Bitcoin is stable can be because people are more likely to invest in a digital currency that has been in the market for a very long time period. Moreover, it can be due to the trust that different marketplaces have in a cryptocurrency like Bitcoin. People might not be willing to take a chance of investing a huge sum of money in a digital currency that has no worth in the world of exchange and virtual currency.
A leading Wall Street trader, Bart Smith in an interview, states:
If you want to own the asset that you can actually use today and that people are functionally using, it’s bitcoin. The use case for bitcoin is valid today, which is the currency of the Internet.
In 2017, Lauren Lyons Cole, a certified financial planner, pointed out that investors hardly think rationally before investing in Bitcoin. They tend to invest at a point when the overall price of the Bitcoin is increasing and they start selling Bitcoins when the price starts decreasing. Hence hardly any profit is made out of it. The actual cycle of Bitcoin is to invest when the prices are low and sell when the prices are high. This is the actual way of generating as much profit as an investor can. She also pointed out that the price of cryptocurrencies make huge jumps in terms of increase. They can either jump up to a swooping 100% increase or they can immediately decline 30% to 40% at least. The point she tried to make here was that, if a person is planning to invest in Bitcoin, then they should be prepared to lose as well.
Today the reality is slightly different as billionaire investors like Bill Miller, are also claiming that Bitcoin is one of the most stable currencies. Different magazines are also discussing how people tend to make more investments in Bitcoin rather than in any other form of cryptocurrency. Bitcoin is going against the predictions that were made in reference to its position in the market.