In the cryptocurrency space, 2017 will be remembered as the year that Bitcoin found its wings and soared to continually unfathomable heights. Valued around $1,000 at the start of the year, Bitcoin has since climbed more than eight times higher. No matter how you look at it, Bitcoin has had a big year.
However, 2017 will also be remembered as the year that Bitcoin began entering the mainstream financial system in earnest for the first time. In the investment world, Goldman Sachs recently disclosed that they are considering developing a trading commodity built around Bitcoin.
Just this week, CME Group upped their timeline for releasing a regulated Bitcoin futures product that will trade on the Chicago Mercantile Exchange. All this mainstream exposure is increasing regulatory oversight and is helping legitimize Bitcoin and other emerging cryptocurrencies. It’s a good thing.
For consumers, Bitcoin is entering the mainstream marketplace as a purchasing option with some online retailers. Led by Overstock.com and Expedia, retailers are embracing Bitcoin as a viable purchasing method, and Overstock is even holding some of that Bitcoin to accrue additional value from the rapidly appreciating currency. In an increasingly digital-first environment, it’s not a stretch to presume Bitcoin’s wide integration into online payment platforms.
For Bitcoin, 2017 has been a year of milestones.
This week, Bitcoin reached another milestone when it surpassed “buy gold” in online search results. According to a Bloomberg report,
“Global searches for ‘buy Bitcoin’ have overtaken ‘buy gold’ after previously exceeding searches for how to purchase silver.”
Until this April, the search term “buy Bitcoin” resided significantly below the “buy gold” searches. This April, the two switched places, and “buy Bitcoin” quickly accelerated to more than triple the search queries for “buy gold.”
This trend hasn’t looked back. While “buy gold” maintains a relatively consistent low murmur, “buy Bitcoin” searches seem to be following the same trajectory as Bitcoin itself, and it’s all up.
There are several reasons that Bitcoin attained this niche milestone. First, people tend to invest in precious metals when other financial markets are in turmoil. For example, gold prices increased fourfold between 2008 and 2009, and then they doubled again the following year.
These price increases coincide with the great recession, and as the financial recovery accelerates, gold prices began to decline again. This year, the stock market is at an all-time high, and the price of gold is correspondingly low. Moreover, with markets continually rising, many investors are looking for growth opportunity, which gold, at the moment, is not.
While the stock market is at an all-time high, those that have not already invested can find themselves on the outside looking in. Buying into already high stock prices is a risky proposition because it assumes continued price increases, and any downturn would be extremely costly.
In short, if investment success is predicated on a “buy low, sell high” proposition, then that’s a difficult thing to achieve right now. Therefore, even though Bitcoin’s price has increased so much this year, its rapid and continual growth patterns still make it an intriguing investment possibility, even at this stage in the game.
The fact that Bitcoin is attracting the attention of investors is actually less surprising than why it’s happening. Investors are not known for missing opportunities to engage in appreciating assets, which Bitcoin certainly is. This Google search data reveals that investors believe that Bitcoin still has room to grow and that it is a secure asset; investors are using their money as a vote of confidence in the currency.
2017 has been a year of milestones for Bitcoin, and this recent data reveals that these trends may continue well into the future.Posted In: Adoption