Cryptocurrencies live up to sudden market swings. Bitcoin’s quick bounce back from the ashes, brings great expectations to new and old investors.
Bitcoin is a concept that the majority of us has heard. Even not so tech-savvy individuals have probably come into contact with the term at least once over the last decade or so. In short, Bitcoin is a cryptocurrency, digital money, that is used for transactions over the internet. This virtual money is nothing more than a computer file that is stored by individuals and corporations in a virtual wallet. Bitcoins are exchanged for services in what has now developed into a crypto market, and it is just as complex as the real-world stock market exchange. “Coins” are earned by solving extremely complex mathematical problems using computer clusters. You solve a “block” of problems, and you move to the next “block” in the chain; which is what gives it its name: blockchain ledger. The process is complicated, to say the least, which is why crypto colocations providers have made a somewhat niche business model selling crypto colocation solutions. There are many cryptocurrencies out there, but Bitcoin has remained on top for many years, or at least it had. Over the last few months, Bitcoin had steadily dropped its market value. Sometimes even by 10% of its market value per day.
The Drop
So, how does the main form of cryptocurrency fall from grace? The answer is easy, offer and demand. Real-world currencies have a subjective value that depends on the demand it receives in international markets. If a currency has high demand, its value rises. If the same currency has low demand, its value drops. The same rules apply to Bitcoin. Even a speculative rumor with enough push can destabilize the value of a currency. Bitcoin faced some backlash when companies like Tesla announced that they would not be accepting Bitcoin as a form of payment any longer. Another attack came in the form of speculation. Even if Bitcoin has been around for more than a decade, its nature is volatile, so investors are sometime skittish about investing in an asset that might cost them in the future. Another blow came in the form of monetary regulations. As the market of cryptocurrencies colocation services began to expand, regulatory entities started cracking down on it. Some countries went as far as banning crypto trading. A combination of all these aspects caused a major drop in the value of all cryptocurrencies and cryptocurrencies colocation solutions.
The Comeback
In the last few months, after the horrendous drop in Bitcoin value, the cryptocurrency is making a comeback. What has changed over time that has sparked the interest in this currency once more? Bitcoin has not changed at all, but rather its surrounding environment. Some previous skeptics, top rollers in the world actually, have realized the flexibility of crypto transactions. As more and more of these individuals and corporations start backing up Bitcoin, so does their money. Real-world money is starting to pour into the cryptocurrency market; which isn’t much different from using real cash to buy virtual goods (video games, music, movies, etc.). This restored faith in Bitcoin has upped its demand, increasing its value for over 1000% since its lowest point a few months ago. Long ago, there were even talks of bitcoin becoming an illegal asset… not anymore. Countries like the USA are giving their approval to store client bitcoins in banking institutions.
It would seem that what was once a speculative creation has now turned into a precious commodity. We’ll have to wait and see if Bitcoin’s rise continues to break the boundaries. If you are interested in investing in this niche, Whitelabel ITSolutions offer one of the best cryptocurrency colocation services available in the market. Our goal is to provide our customers with a colocation facility that is not only efficient, but can guarantee the power and cooling necessary to meet the requirements of our Bitcoin/Litecoin Miners, allowing for maximum scalability and profitability.
