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Why Do Bitcoins Have Value? – NextAdvisor

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The price of a single Bitcoin has seen a massive increase since the cryptocurrency was first introduced in 2008 — with big ups and downs along the way. It climbed to an all-time high of around $60,000 in April, and has continued fluctuating since.
Despite the volatility, Bitcoin continues to draw interest from investors for its long-term record of building and maintaining value. But unlike a stock, which has value because it represents part ownership of a company, or even a bond, which represents the value of a debt you’ll be repaid upon maturity, it can be harder to pinpoint the value created by a decentralized, digital currency with such a short history.
These swings can make investors wary, but also beg the question — why does Bitcoin have value in the first place?

RELATED: Top Crypto News This Week

Bitcoin as Currency, and Why Currencies Have Value

Currencies have value because people think they do, and societies or groups have decided they are going to be used as a medium of exchange. 
Fiat currencies became widespread after the elimination of the gold standard (which mandated that every dollar be backed by a holding of physical gold). Fiats — like the U.S. dollar — aren’t backed by any commodity, and have value because a broader system or society accepts that they do. 
For example, you can take a $20 bill to the store and purchase $20 worth of goods, time, and effort. But the physical piece of paper that you use to pay holds no inherent value.
Bitcoin, a cryptocurrency that was created and released by a pseudonymous figure by the name of Satoshi Nakomoto, has some characteristics of a store of value that resemble existing currencies like the U.S. dollar or Japanese yen:
All of these factors help establish Bitcoin as a type of currency, but they do not explain Bitcoin’s exponential price growth and unique appeal as a store of value. Cash savings aren’t considered a good investment strategy after all — typically, your U.S. dollars will see considerably more value growth in an investment vehicle than saved as cash. Even among cryptocurrencies, Bitcoin is unique for its value. Someone could make another type of digital asset, with all of the same properties, and it may not ever have any value (in fact many have tried and failed). So why Bitcoin?

Why Does Bitcoin Have Value?

In short, Bitcoin has value “because people think it does,” says Bryan Routledge, associate professor of finance at the Tepper School of Business at Carnegie Mellon University. “And if that sounds kind of unstable and goofy, it’s because it is.” 
People believe Bitcoin will one day be worth more than it is today, which increases their demand for it, and its value continues to grow, similar to gold. 

“Gold is just dirt that people decided that, OK, this dirt that is kind of shiny, it has value to people,” says Kiana Danial, author of “Cryptocurrency Investing for Dummies.” “Humans assign that value to gold, to your $100 bill. The $100 bill doesn’t itself have value. We assign that value to it.”
Like gold, you can’t (usually) walk into a store and transact directly with Bitcoin, but you can buy and hold it. But gold has one property that Bitcoin doesn’t — at least not yet: it’s been around much longer, so its lasting value has been proven time and again.
[READ MORE]: You Can Buy More Things Than Ever With Crypto. Here’s Why You Shouldn’t
“What you want to know is, in a year from now, will your Bitcoin be recognized as a Bitcoin?” says Routledge. The answer to that, Routledge says, depends on the future of blockchain technology and a belief that that technology will continue to gain mainstream popularity.

What Do Investors Need to Know?

The price of Bitcoin fluctuates a lot, and it’s impossible to know whether it will continue to rise in value or fall into obscurity, which is why it’s smart to allocate only a small percentage of your overall assets to Bitcoin. Experts recommend keeping any cryptocurrency investments to less than 5% of your portfolio, just like any other speculative investment. And don’t invest in any cryptocurrency at the expense of other financial goals like having an emergency fund or saving for retirement
Similar to gold, people buy Bitcoin “not because they expect to be able to go to the store and spend it, but because they expect it to hold its value,” Galen Moore, director of data and indexes at crypto news outlet Coindesk, told NextAdvisor recently
But Bitcoin is only the most famous among thousands of different cryptocurrencies. Other cryptocurrencies come with different considerations for investors.
If Bitcoin is digital gold, then Ethereum, the second-largest cryptocurrency by market cap, is more like oil. And like oil, its value is connected to its real-world uses — even if those uses haven’t quite made it the mainstream. 
[READ MORE]: Ethereum: What You Should Know Before You Invest

Oil itself is valuable, but you can also invest in oil futures on the commodities market, or invest in stocks representing oil companies and energy technologies. Similarly, cryptocurrency investors might invest in Ethereum, which has a native currency called ether. 
The Ethereum blockchain serves as a basis for innovation and development in the cryptocurrency space — from digital art sales using NFTs to decentralized peer-to-peer lending. So its currency, ether, has an inherent value: access to that network, says Routledge. 
Ethereum may have a clearer inherent use case where Bitcoin does not, but that does not mean it’s guaranteed to maintain or increase its value. With thousands of different cryptocurrencies all claiming to address some unmet need or opportunity, experts recommend keeping your crypto investments to the main two cryptos— Bitcoin and Ethereum. Still, all cryptocurrency assets are unregulated and speculative, and there’s not enough data to make any sort of concrete predictions about how your investment may grow in the future. 
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Intel, Block Supporting Mining a Positive for Bitcoin’s Price: Analyst – CoinDesk

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Large tech companies such as Intel and Block (previously Square) delving into making mining more efficient and accessible is likely to help the price of bitcoin by encouraging mass adoption, said an analyst for U.K-based digital asset broker GlobalBlock.
Intel, one of the world’s largest chip makers, said on Jan. 18 it will unveil an “ultra low-voltage bitcoin mining ASIC” which will be a more efficient specialized mining computer, competing with current miners that are in the market. “The fact that a $200+ billion tech firm is providing solutions for Bitcoin mining is more confirmation of big players entering the crypto space,” said GlobalBlock’s analyst Marcus Sotiriou.
The chipmaker said its new miner will reduce power consumption by about 15%, Sotiriou said, adding that such an increase in efficiency will help more institutional investors to enter the sector as ESG (environmental, social and governance) is one of their key investment priorities. If such a scenario plays out, it will likely help support bitcoin’s price.
Read more: How Bitcoin Mining Works
Crypto miner Griid Infrastructure, which is going public via a merger with special purpose acquisition company Adit EdTech Acquisition Corp., has already signed a supply agreement with Intel to potentially buy the chip maker’s new ASIC miners, according to a filing.
Meanwhile, payments giant Block said on Jan. 13 that it’s going ahead with its plan to build an open-source bitcoin mining system to make “mining more distributed and efficient.” If this feature is integrated with Cash App, it might increase the use of bitcoin to pay for goods and services by its users, furthering bitcoin adoption by the masses, Sotiriou noted.
“If successful, this will dramatically increase bitcoin’s use case as a means of exchange, rather than just a store of value – this would result in significantly more adoption and hence help bitcoin reach price figures of over $100,000,” he said.
Bitcoin is now trading near $42,000 since reaching its all-time high of just under $69,000 in November. The stocks of some miners, which are highly leveraged to the price of the crypto currency they mine, have tumbled more than 50% since their peak.
DISCLOSURE
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
Aoyon Ashraf
Aoyon Ashraf is crypto mining reporter with more than a decade of experience in covering equity markets
Follow @@Aoyon_A on Twitter
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The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
@2021 CoinDesk

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Dogecoin value 2022: Why did Elon Musk make the cryptocurrency's value rise? – Marca English

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Dogecoin’s value increased by 5,859% over the past 12 months
Dogecoin rose to $0.20 – a 15% increase in value – after billionaire Elon Musk announced Tesla would accept the cryptocurrency for purchasing merchandise.
The cryptocoin with the shiba inu dog meme originally started as a joke, but Musk’s various tweets about it have helped Dogecoin increase by 5,859% over the past 12 months, according to Coinbase. Tesla’s website started accepting Dogecoin soon after, with items such as an electric quad bike for kids priced at 12,020 doge ($2,368), the “Giga Texas Belt Buckle” for 835 doge ($156), and a whistle for 300 doge ($57).
This is just one of many tweets by Musk regarding Dogecoin, the first one coming December 20, 2020 when he tweeted, “One Word: Doge.” Shortly after his tweet, the value of Dogecoin rose by 20%.
Musk followed that post with a barrage of Dogecoin-related tweets in February 2021, including, “Dogecoin is the people’s crypto,” and “no highs, no lows, only Doge”. After these tweets, Dogecoin’s value soared by roughly 40%.
After a full year of showing support for Dogecoin, on December 14 Musk said Tesla would accept the cryptocoin to pay for merch. Dogecoin spiked more than 20% after his tweet.
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This mom quit her job to focus on crypto full time and build 'generational wealth.' Now she makes around $80,000 per month – CNBC

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This mom quit her job to focus on crypto full time and build ‘generational wealth.’ Now she makes around $80,000 per month  CNBC
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