MONEY|DIGITAL GOLD|BITCOINS

Bitcoin is A Winner As Gold Is Converted And Pouring From People.

The worlds biggest holders of gold are now converting into cryptocurrency for higher returns

What Is Bitcoin?

Bitcoin is a digital currency a form of cryptocurrency that was first created in 2009. It is not an asset in physical forms like cash, gold, or a commodity like oil.

Most of the banks in the world own digital money. Online payment providers are Alipay, WeChat Pay, and M-Pesa is also those who deal with digital money.

Digital money is issued by banking institutions of that part which is held electronically by them for trading or investing.

The central bank of every country asks banks to hold physical money in liquid form as a reserve, but there are no requirements for digital money, so trade is much faster in movement.

Cryptocurrency, is a virtual currency. It is not regulated. It is digital currency secured by cryptography, It is either on a blockchain or distributed ledger. C No single institution can control the transactions or the balances in the account.

Bitcoin is a decentralized digital currency, it does not have a central bank or single administrator. It does not need any intermediaries. It is part of the cryptocurrency world.

Bitcoins are very popular despite the fact they are very risky and many people have lost money due to death or forgetting the key number or accidentally losing the computer hard disk. Since there are no intermediaries or direct control of the Central Bank or any other agency there can be heavy losses.

Examples of Bitcoin owners who died and left a heavy amount of wealth behind them.

Mircea Popescu Bitcoin billionaire Mircea Popescu who was one of the largest owners of the cryptocurrency drowned and died on the Costa Rican coast, owned over $1 billion in Bitcoin.

The problem that arises is who becomes the owner of the bitcoins? A large holding has been lost by accident but there is no central agency to control it. A lost key an accidental bug or an accident are other examples by which you can lose bitcoins

Gerald Cotton In 2019, Gerald Cotten died unexpectedly. He was the founder of Canada’s largest crypto exchange. His wife did not have the investor's private customer keys of $135 million in cryptocurrency as they were only maintained with Cotten.

James Howells James Howells from the United Kingdom had mined 7,500 Bitcoins and stored them on the hard drive of his laptop, which was lost when he by mistake threw away the hard drive accidentally while cleaning his home in 2013. Those bitcoins would be worth $255 million presently if they were still available.

Bitcoin a winner during the pandemic

Gold, is a very safe asset people value the physical asset gold because it has always been a source of security being time tested. Bitcoin is relatively new.

In 2020 bitcoins have been named digital gold. The millenniums have suddenly started liking it during the Covid period. In January 2921 the market capitalization increased and became $1 trillion in value. In May 2021 the market crashed.

Taking India as an example as people in this country are crazy over gold and quite obsessed with it.

On January 1 this year, Bitcoin price in India was approximately $29,300 (Rs 21.38 lakh), according to CoinMarketCap. It increased to $37,600 (Rs 27.44 lakh) an increase of 30% even though in May the market had crashed.

In the international market in the first week of June, gold prices were at $1,904.36 (approximately Rs. 1.39 lakh) per ounce. Between January 1 and June 4, the value of gold has remained relatively static at around $1,893.66 ( Rs. 1.38 lakh) per ounce, as given for all the countries in the world in Goldprice.org.

What does this mean? It means that if you were to invest $10,000 in gold and in bitcoins on January 1, your Bitcoin would have increased by 30%to $13,000 today, but the investment in gold would be unchanged at $10,000.

Bitcoins were thus a clear winner in the race between gold and bitcoins.

Who is pouring money into bitcoins?

The newspaper reports, The Print and The Times Of India are stating that even Indians who are completely obsessed with gold are leaving the platform of physical gold and increasingly preferring to trade in bitcoins or as it is called today the digital gold.

Position in China China had taken a decision to ban the financial and payment institutions for providing cryptocurrency services on May 2021 and the market crashed as reported in India Today by $1 trillion but it recovered again within two days.

Confusion in India Cryptocurrencies are not considered to be illegal in India. They are however not regulated. Buying and selling Bitcoin and holding it as an investment is permitted but no governing body is there to authorize its sale or to protect it is there. In India, there was total confusion about whether Bitcoins were legal or not. Nischal Shetty CEO and Founder WazirX clarified in an interview to IndiaToday:

“There is a lot of confusion in India right now. The thing is that there are no regulations in the country yet. When people hear that, they get scared. The fact is that a lot of things on the internet are unregulated. These included services like Ola and Uber, even e-commerce is un-regulated.”

The Indian government has decided to regulate digital currencies in India. The Ministry of Corporate Affairs (MCA) has now made it mandatory for companies to disclose crypto trading/investments during the financial year.

The regulation in India has been decided after Elon Musks' statements that bitcoin is not real money and he would stop the transactions of bitcoins at Tesla. Then he reversed his statement that would resume transactions with the cryptocurrency when mining is done with more clean energy.

These statements were very helpful for the Indian government to think of regulating it and making it into real money.

To conclude

Bitcoin trade has increased manifold in countries like China and India who are obsessed with gold.

An increasing number of young people have now converted the money that was in physical gold into digital gold.

Bitcoins is quite popular in the USA.

In India, the trade has increased from $200 million to $40 billion as reported by The Times of India that young people between the age of 22–35 are mainly responsible for pouring in bitcoins by conversions of gold. It is those who have the risk attitute who can take this decision.

The future of bitcoins is very bright as it turns from unregulated to regulated trade in countries.

Bitcoins can be exchanged for cash but remember to keep the key very safely. My student lost 70lakhs in Indian Rs. and in the US $94710 by losing the key.

Take care ! Enjoy your money in digital gold but be very careful