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Undoubtedly the digital currency is the best performing asset class for 2013
The tangible value of Bitcoin is getting credibility as some real demand emerged once again to prop up prices of the digital currency. Current prices recovery to around $820 has started because of private interest – namely Overstock’s CEO Patrick Byrne who revealed in an interview with Fortune Magazine around Christmas that it will not take much time before his publicly listed e-tailing company will start accepting Bitcoin as payment.
Since Bitcoin prices have basically erased the Chinese debacle from mid-December now might be the time for the private sector to figure out the proper value of crypto currencies. Many analysts are predicting more volatility and there is no doubt in our mind that it will stay with us in 2014. However we have to realize that the more Bitcoins are actually mined the more volatility in the end will subside.
The fight between skeptics and proponents will go on until one of the sides capitulates and acknowledges that the unforgiving market power has run its course and there is no turning back. The long term growth potential for the currency will come as more merchants start adopting it and will end up as a substitute to more expensive online payment solutions.
That was one of the main points in Patrick Byrne’s interview where he shared his insights about the thin margins that online e-tailing is operating under – about 2% for Overstock.com. According to him, Bitcoin could drop interchange fees by 2% and the savings induced would actually produce a substantial improvement in the company’s business. The interview actually triggered a 10% rally in Overstock’s share prices.
The growing acceptability is stunning – the number of businesses on CoinMap.org has tripled in the past month to more than 2200 as of today and we cannot deny the fact that there is enormous room for growth for crypto currencies with their currently miniscule market cap even for Bitcoin.
We are not sure whether 2014 will be as big for digital currencies as 2013 has been, not many people were aware of the existence of Bitcoin at this time last year and now analysts are voicing their opinions here and there that this year will be THE year – has the analyst crowd become too one sided or the trend has just started.
As we can see in a self-explanatory graph by Forbes Magazine Bitcoin has ended the year as the best performing asset along with Litecoin, which is still much lower than the prime member of the ever-expanding quantity of providers.