In April 2021, the price of a single Bitcoin, the world's most popular cryptocurrency, surpassed the $60,000 mark. And the market value of all cryptocurrencies reached a staggering $2.5 trillion. The digital asset's promise to create a new decentralized financial system, beyond the control of governments and banks, has captured the imagination of the world.

However, many believe that so far the Bitcoin dream has not been realized. Instead of replacing conventional money, Bitcoin has instead become a highly volatile asset resulting in many winning and losing big through their participation.

For the believers, this digital asset is still viewed as a stepping stone towards a utopian future. For the skeptics, the crypto market is nothing more than a digital casino that is too volatile to be trusted. This has left many wondering what will become of the Bitcoin dream.

What Is Bitcoin?

It all started in 2009, a mystery man using the alias Satoshi Nakamoto laid the foundation for what would become the world's most popular cryptocurrency and created the first Bitcoin. This was the start of a digital revolution. But Bitcoin and the thousands of other crypto coins that followed aren't actually coins but instead code. This code is recorded on a digital ledger that extends the more people use them. The purpose of this virtual currency was to provide an alternative to fiat money.

The current financial system is based on trust. The way money moves around the economy is controlled by banks and other financial institutions. Faith that their ledgers are accurate is vital because money is simply a social convention. It exists and has value just because people agree that it does. This agreement only works because we put trust in our financial institutions such as banks. Bitcoin, on the other hand, does not require trusted institutions.

Nakamoto wanted to create a secure system that did not rely on any trust at all. In order to achieve this, the coins are registered on a revolutionary technology called a blockchain . This is a ledger of transactions that are not controlled by any centralized institution. Rather, a network of computers across the globe verifies and logs transactions through a process known as mining. This allows Bitcoin to work as a decentralized system, allowing many to put their faith into it as it may not be exploited by any third party.

But Bitcoin is yet to be classified as money. While the crypto mania is at a fever pitch, the price of Bitcoin is extremely volatile which makes it difficult to be used as a means of currency. As a result of the high volatility, the price tends to fluctuate tremendously and that too in only a matter of seconds.

Bitcoin's Rising Popularity

Bitcoin is only 12 years old and relatively novel. However, despite its young age, it has been able to gain significant traction which has definitely helped it on its road to one day becoming an actual currency. Investing in bitcoin and other digital assets has risen significantly in 2021, both with institutional and retail investors alike.

Coinbase, the world's largest cryptocurrency exchange, reported $335 billion in trading volume in the first quarter. Of this amount, $120 billion was reported to come from retail transactions and $215 billion from institutional trading. 30 billion dollars worth of trade was transacted during the first quarter of 2020.

Bitcoin's popularity and value have been influenced by a variety of factors. There is a limit to the number of Bitcoins that can be mined, which is 21 million. Out of this, about 19 million bitcoins have already been mined. Due to its scarcity, Bitcoin can retain its value. Moreover, as the inflation claims continue to rise, many see it as an effective hedge.

Furthermore, its high volatility contributes to its increasing interest and value. Additionally, trading platforms have played a vital role in offering support to smaller investors. With the help of advanced technologies such as Artificial Intelligence (AI) and Machine Learning (ML), specialized software, and powerful algorithms, trading platforms, such as Immediate Edge, allow traders and investors to capitalize on short-term crypto booms. Many of these platforms also offer auto-trading which has proven to be a safe haven for novice investors taking their first steps along the blockchain path.

The cash treasuries of several public companies are also being held in cryptocurrencies, especially bitcoin. Tesla was at the forefront of this cryptocurrency hype in February, when it announced a $1.5 billion investment in Bitcoin. They even offered Bitcoin as a means of payment for their cars. Since then, Tesla has gone back on its statement amid speculation that it will sell its Bitcoin holdings. MicroStrategy is another Bitcoin supporter that just invested $10 million in the cryptocurrency.

Furthermore, major financial companies such as PayPal, MasterCard, and Square, as well as the Oldest Bank in America, BNY Mellon, are supporting this cryptocurrency. Venmo and Visa are also closely following the crypto trend. Bitcoin's emergence has been powered by institutional investments, which have reinvigorated lost trust in the digital currency.

Bitcoin’s future as a currency still remains hazy. It may yet become a stable asset such as gold or prove to be a bubble that eventually bursts. But one thing is for certain: the utopian dream of Bitcoin becoming a new form of money and replacing the traditional fiat currency system is just as elusive as the digital asset’s creator.