Buy Cryptocurrency With BTC – The Circulation of Crypto in The Digital Economy
The advent of Bitcoin heralded the beginning of an entirely new era in global economics. What had once been perceived as a monopoly dominated by the United States Dollar was suddenly and deliberately shattered by the emergence of a disrupting technology that matched, rivaled, and even outpaced the existing framework of financial transactions. What took days to complete for the traditional financial system became a question of a few seconds for the blockchain – the underlying technological base supporting all cryptocurrencies, starting with Bitcoin.
The appearance of a free and trustless environment designed for catering to users and their needs made it possible for individuals and companies alike to seek funding, provide liquidity, launch their own projects, and even partake in a new and thriving global economy with Bitcoin in the lead. Bitcoin is indeed the most coveted cryptocurrency in the world with over 65% of cryptocurrency users holding the given asset. It is unsurprising that Bitcoin has gained such notoriety, considering that if $22 invested in Bitcoin as far back as 2012, the time of its inception, the same amount would be worth around $1 million today. That indicates total growth in value of over 540,000% within a period from 2012 to 2022. No asset in history has been able to match such statistics.
Bitcoin is not alone in its strive for dominance on the cryptocurrency market, as it has many competitors. In fact, the top 10 cryptocurrencies on the lists, which are never fully constant, constitute about 88% of total cryptocurrency market value. As of the time of writing, there were more than 6,000 different cryptocurrencies being traded across over 260 cryptocurrency exchanges around the world.
The popularity of Bitcoin has grown so much over the years that it has been calculated that the king of cryptocurrencies is posted as a hashtag on social media roughly every 3 seconds. Such dynamics stand in line with the prediction that the blockchain market will recover and grown by an additional $230 billion by the middle of 2023 and trace a solid recovery, following its shocking collapse in the wake of the bankruptcy of the FTX exchange and the preceding breakdown of the Terra/Luna ecosystem.
Blockchain penetration is marshaling across the planet with India becoming the country with the most number of cryptocurrency holders than any other country. India is the only state in the world that can boast that it has more than 100 million users, a solid third of all cryptocurrency holders on the planet. People invest in cryptocurrencies at a staggering pace, with over $112 billion being traded every day across various exchange platforms.
Considering the ongoing penetration of cryptocurrencies into the global economy, one has to wonder whether the assets have any practical application. Bitcoin is too restrictive in price to be of any use as a means of transacting, and is more often used as a means of value storage, speculation and investment. In fact, cryptocurrencies do have some practical applications outside the digital environment, considering the fact that over 17,000 retail and online merchant outlets accept cryptocurrencies as a means of payment around the world. Crypto ATMs were popular at the onset of the digital economy, but have since faded from public view as Bitcoin cryptomats, giving way to altcoins as the primary source of income for the companies servicing them.
In fact, altcoins like Ethereum and some other popular coins make up the majority of trading volumes by virtue of their more accessible prices. Traders make hefty profits by trading various coins and altcoins on a number of exchanges through the application of multiple strategies, such as hedging, scalping, arbitrage trading, and many others. Combined, these strategies compose the majority of transactions on exchanges and make the cryptocurrency market run.
But what is most impressive is that the king of cryptocurrencies – Bitcoin – is increasingly being used as a means of payment inside the cryptocurrency industry. The vaunted currency has lost much of its value over the course of 2022, dropping from the all-time-high of $65,000 in 2021 to just over $17,000 by the end of 2022. Such dynamics have discouraged many to reconsider their investment strategies and resort to the purchase of other cryptocurrencies using their Bitcoin holdings.
The given approach has become extremely relevant in light of the fact that Ethereum has outpaced Bitcoin in terms of value growth. This has become possible even before the transition of the Ethereum network to the Proof-of-Stake consensus algorithm, which significantly bolstered the system’s positioning as a passive income generation source. The detraction of Ethereum assets from DeFi platforms and their liquidity pools into staking pools provided by network operating nodes played into the hands of the coin’s capitalization, making it an attractive asset to hold, rather than trade.
This, in turn, has led to the influx of Bitcoin funds into the Ethereum and altcoin markets. In such a way, Bitcoin is being used for the purchase of cryptocurrencies in a never-ending cycle of asset recirculation inside the digital economy.
Buy Cryptocurrency With BTC – Just Do It
There are many payment methods available on the cryptocurrency market and fiat on-ramps are among the most popular. The multitude of investment apps on the market make it easy for users to open up wallets and start making transactions using their bank accounts. The verification process on many such applications involves the application of Know Your Customer procedures that require users to disclose their identities. This is a necessary measure required by international legal oversight authorities for making sure that no illegal actions or transactions are made using cryptocurrencies.
The advent of such platforms was spurred by the need to convert USD to cryptocurrencies, namely – Bitcoin. But as traders started realizing the potential of other cryptocurrencies, it quickly became clear that internal exchange mechanisms were essential. In order to trade Bitcoin for other cryptocurrencies, exchanges started developing swap mechanisms that would allow users to exchange their available Bitcoins for newly released tokens and altcoins. Though the soundness of such swaps was dubious in those times, because no one believed in the potential of Bitcoin to grow beyond the $10,000 mark, the coin Ether quickly became an alternative source of funding within ICO projects alongside the USD.
By following a few easy steps, users can access a great variety of app ecosystems and start making trades that can propel them into cryptocurrency space. Users can pay with Bitcoin for any number of cryptocurrencies, considering their price and the price of the underlying asset. With Bitcoin losing value in light of the slew of scandals and shocks suffered by the cryptocurrency industry, many traders are migrating back into the commodities market, while others are thinking which wallet best suits their future needs in decentralized space – custodial or non-custodial.
Some investors fear losing their Bitcoins and the value the latter could generate. But they often forget that the cryptocurrency market is in perpetual motion and the dynamics of prices are so unpredictable that diversification is the key. Holding a portfolio of multiple assets is the best way of hedging risks and watching alternative assets grow in price, while investing them into various decentralized finance venues and liquidity pools that generate passive income.
The idea of using BTC within decentralized space has also been growing with the advent of the metaverse environment, which encourages users to migrate into digital economic realities. The true applications of cryptocurrencies can be explored only within such a setting, given the fact that Web3 foresees a complete detachment from physical space in favor of virtual reality. But it would be naïve to think that fiat will cease to act as a major source of liquidity in Web3, since new users entering the space will still need to purchase their first cryptocurrencies using some kind of currency.
It is highly unlikely that Bitcoin will be handed out like candy in metaverses, only some tokens may be used for such purposes as user incentives. But the reality remains that Bitcoin is still a force to be reckoned with, one that will retain its value and investment attractiveness for many years to come.
Key Takeaways
The world is rapidly moving towards a digitized form of economic interaction, one in which cryptocurrencies will be playing an increasingly pivotal role. The use of digital assets as a means of payment can best be described as the migration of liquidity within a digital environment, one in which Bitcoin may be playing the role of a reserve currency. However, considering the current dynamics of the asset, many investors are likely to diversify their digital asset portfolios at the expense of Bitcoin to have more opportunities of entering new coins and watching them generate yields.
