Home Cryptocurrency News Bitcoin How Mistrust And Rebellion Are Fueling The Bitcoin Boom

How Mistrust And Rebellion Are Fueling The Bitcoin Boom

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STEPHANE DE SAKUTIN/AFP/Getty Images

This week, all eyes have been glued to &quot;the coin rush&quot; — reporters, investors, analysts and blockchain experts all sharing their insights on the global cryptocurrency market. According to Yahoo Finance, Bitcoin, the world’s first decentralized digital currency, is up by 1600 percent this year. Just this past Tuesday, it reached an all-time high of nearly $18,000, compared to its meek start at less than one U.S. dollar per coin in 2009. This trend of booming popularity is true for other cryptocurrencies such as Litecoin and Ethereum, which joined the market a few years after in 2011 and 2013. Bitcoin has gone from an obscure, speculative investment idea to a mainstream and sought-after phenomenon, all in less than a decade.

What’s been fueling this seemingly sudden Bitcoin boom? It’s a variety of different factors, but mainly, it’s mistrust in the government and the rebellious nature of a new generation. Bitcoin is innately anti-institution, and purchasing it goes against traditional wisdom because it lacks inherent, tangible value. On the other hand, that’s a large part of its appeal to anti-institution investors – you don’t have to look at earnings, yield curves or otherwise justify valuations. Bitcoin is never under or overvalued because you simply don’t know what the appropriate valuation is.

blockchain.info

Average USD market price across major bitcoin exchanges.

Bitcoin Popularity and Lack of Faith in Institutions&nbsp;

The recent explosion of interest in Bitcoin and other cryptocurrencies links to the current state of our government and financial systems. The political environment in the U.S. is the most tumultuous it’s been in recent history, and evidence would suggest that has had a direct impact on the markets and how people are investing their money. The rise in Bitcoin is closely correlated to people’s faith, or lack thereof, in government-backed institutions. Therefore, the less faith people have in the political climate, the higher Bitcoin valuations will continue to rise.

There could be a generational gap here as well. There’s been a downward trend of trust in government across the board. Specifically, Millennials are showing less faith in institutions and the government than previous generations have. They’re also showing some of the highest interest and participation in Bitcoin, with more than a third of millennials saying they’d rather own Bitcoin than stocks, according to a survey by venture capital firm&nbsp;Blockchain Capital. Moreover, when politics are discussed in the U.S., you’ll commonly hear about “fake news” and how the government system is corrupt. This mentality is common among millennials—thus, indirectly increasing the popularity of Bitcoin.

Pew Research Center

Government trust by generation.

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STEPHANE DE SAKUTIN/AFP/Getty Images

This week, all eyes have been glued to “the coin rush” — reporters, investors, analysts and blockchain experts all sharing their insights on the global cryptocurrency market. According to Yahoo Finance, Bitcoin, the world’s first decentralized digital currency, is up by 1600 percent this year. Just this past Tuesday, it reached an all-time high of nearly $18,000, compared to its meek start at less than one U.S. dollar per coin in 2009. This trend of booming popularity is true for other cryptocurrencies such as Litecoin and Ethereum, which joined the market a few years after in 2011 and 2013. Bitcoin has gone from an obscure, speculative investment idea to a mainstream and sought-after phenomenon, all in less than a decade.

What’s been fueling this seemingly sudden Bitcoin boom? It’s a variety of different factors, but mainly, it’s mistrust in the government and the rebellious nature of a new generation. Bitcoin is innately anti-institution, and purchasing it goes against traditional wisdom because it lacks inherent, tangible value. On the other hand, that’s a large part of its appeal to anti-institution investors – you don’t have to look at earnings, yield curves or otherwise justify valuations. Bitcoin is never under or overvalued because you simply don’t know what the appropriate valuation is.

blockchain.info

Average USD market price across major bitcoin exchanges.

Bitcoin Popularity and Lack of Faith in Institutions 

The recent explosion of interest in Bitcoin and other cryptocurrencies links to the current state of our government and financial systems. The political environment in the U.S. is the most tumultuous it’s been in recent history, and evidence would suggest that has had a direct impact on the markets and how people are investing their money. The rise in Bitcoin is closely correlated to people’s faith, or lack thereof, in government-backed institutions. Therefore, the less faith people have in the political climate, the higher Bitcoin valuations will continue to rise.

There could be a generational gap here as well. There’s been a downward trend of trust in government across the board. Specifically, Millennials are showing less faith in institutions and the government than previous generations have. They’re also showing some of the highest interest and participation in Bitcoin, with more than a third of millennials saying they’d rather own Bitcoin than stocks, according to a survey by venture capital firm Blockchain Capital. Moreover, when politics are discussed in the U.S., you’ll commonly hear about “fake news” and how the government system is corrupt. This mentality is common among millennials—thus, indirectly increasing the popularity of Bitcoin.

Pew Research Center

Government trust by generation.

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