THE RISE & FALL OF BITCOIN

Bitcoin was the talk of the town in 2017. Everyone was buying it, trading it, and investing in it. The cryptocurrency had skyrocketed from just a few cents to over $20,000 in a matter of years. It seemed like nothing could stop Bitcoin's upward trajectory. However, in 2018, things took a turn for the worse.

The year 2018 was a hard year for Bitcoin. The cryptocurrency lost more than 80% of its value. The market was crashing, and many investors were panicking. For those who had invested heavily in Bitcoin, it was a heartbreaking and gut-wrenching experience. But what caused the cryptocurrency's fall, and will it survive?

One of the factors that caused Bitcoin's fall was the increased regulations and scrutiny by governments across the world. Governments were worried about the potential use of cryptocurrency for money laundering, terrorist financing, and other illegal activities. They imposed regulations that made it harder for people to buy and trade in cryptocurrencies. This caused a decline in demand for Bitcoin, and this, in turn, caused the price to fall.

Another factor that contributed to Bitcoin's fall was the emergence of other cryptocurrencies. Bitcoin was the first cryptocurrency and had a monopoly on the market for a long time. However, as time went by, other cryptocurrencies emerged that offered better features and advantages over Bitcoin. For instance, Ethereum offered smart contracts, and this made it more attractive to developers. Litecoin had faster transaction speeds and was cheaper to use. These cryptocurrencies offered better alternatives to Bitcoin, and many investors began shifting their focus to these new players. This caused a reduction in demand for Bitcoin and a fall in its price.

Additionally, Bitcoin had some inherent flaws that hampered its growth. The cryptocurrency was designed to have a limited supply of 21 million Bitcoins. This means that once all the Bitcoins are mined, there will be no more. This made Bitcoin's price volatile as it was subject to supply and demand dynamics. As the demand grew, the price shot up, and when the demand reduced, the price fell. This was a major drawback for investors who wanted to invest in a secure and stable asset.

Despite these challenges, Bitcoin has managed to survive and even thrive. In 2020, the cryptocurrency began to show signs of life after years of decline. Its price began to rise again, and it reached an all-time high of over $60,000. This sudden surge in value was spurred by several factors.

One factor that played a significant role in Bitcoin's recovery was the Covid-19 pandemic. The pandemic forced many people to adopt digital payments and transactions, and this, in turn, increased the demand for Bitcoin. People saw Bitcoin as a way to protect their wealth from inflation and the fluctuating value of traditional assets. As a result, many institutions and corporations began to invest in Bitcoin, and this drove up the price.

Another factor that played a crucial role in Bitcoin's recovery was the adoption of blockchain technology by businesses and institutions. Blockchain technology is the underlying technology behind cryptocurrencies like Bitcoin. It offers a secure, decentralized, and transparent way to store and transfer data. Many businesses and institutions saw the potential of blockchain technology, and this, in turn, caused a renewed interest in Bitcoin.

Additionally, the emergence of the decentralized finance (DeFi) market has been a significant booster for Bitcoin. DeFi is a new way of doing finance without the need for traditional banks or middle-men. It uses blockchain technology to offer financial services like lending, trading, and borrowing to anyone with an internet connection. DeFi has exploded in popularity, and this, in turn, has boosted the demand and price of Bitcoin.

In conclusion, Bitcoin's rise and fall have been a roller coaster ride. The cryptocurrency has faced a lot of challenges, from increased regulations to the emergence of other cryptocurrencies. However, in recent years, Bitcoin has shown a remarkable resilience and ability to bounce back. With the increasing adoption of blockchain technology and the emergence of new markets like DeFi, Bitcoin's future looks bright. While there are still challenges ahead, Bitcoin has proven that it has what it takes to survive and thrive.