Bitcoin value skyrocketing, reaching all-time highs

2020 has been a wild year in the markets, and the hottest asset is one of the considered most risky assets; Bitcoin. In 2017, Bitcoin has its historic climb in the markets, and then it has its downfall back in 2018. Now Bitcoin is at it again. It's because of the surge of investors that are driving it into its record-high. They see Bitcoin as an uprising in the world's financial systems and they have succeeded in telling people to listen to them.

Bitcoin is popular because of the way it works. It is not tied up to any physical assets even the US Dollar. Bitcoin is purely software. It runs on a network of independent computers. Its purpose is to allow two people to exchange values directly without a central party controlling the network. There is no government, no central banks, no federal reserves that could halt its process or change its value. They simply form an archive of transactions between people and it's on a global scale. 

The archive is not controlled by a single computer or part, the archive is copied to every computer involved in this network. It is commonly known as a Cryptocurrency Blockchain. This Blockchain can be reviewed by anybody and by everybody so it operates in complete transparency that prevents counterfeiting and double-spending. 

Every time someone makes a transaction, an encrypted signature is added to that archive for verification of savvy individuals who understand the blockchain network. It's an honest network. You can't counterfeit Bitcoin. Sounds like an absurd claim right? Except that is true. 

Bitcoin not yet available for the public is created through a process as Bitcoin Mining. Miners use powerful or even supercomputers to solve complex mathematical problems to process Bitcoin transactions. It unlocks new digital coins. But these coins aren't limitless. In a paper released by Satoshi Nakamoto, 'Bitcoin: A Peer-to-Peer Electronic Cash System, Bitcoins founding code was embedded with a condition; that there will always be a predetermined number of coins available. This insufficiency or scarcity is what gives Bitcoin its value. These days, almost 18.6 million of the 21 million Bitcoins have already been mined. 

While the number of available Bitcoins is growing, the demand for them is growing even faster. Bitcoin is becoming easier to buy on apps like PayPal and RobinHood who are drawing investors who are looking for quick returns while trading in anyplace even at home. In 2020, there have been 38 million small Bitcoin transactions that are less than a thousand dollars. Larger investors are accumulating as well.

As financial systems become more digital, it's leading Bitcoin to become a mainstream currency. When the pandemic hit, the central banks responded by pushing down interest rates and lower their currency values. Bitcoin proponents say that if dollars are plummeting down, Bitcoin should be going up. And that boosted the sudden surge of Bitcoin. People are willing to take risks to assets that are high paying in terms of returns. 

On December 16, 2020, seems ages ago now isn't it? On December 16, 2020, Bitcoin tops $21,000. But now, it is almost at $40,000. For many investors, these bets on Bitcoin are paying off.