Cryptocurrency chaos

The riskiest sector of the market has generated an insane amount of buzz within the past year.

The cryptocurrency Dogecoin saw a major spike this past week.

The cryptocurrency “Dogecoin” saw a major spike this past week.

Alex Kajda, Staff Writer

About a decade ago, Bitcoin was somewhat of a novelty on the internet. It was this mysterious coin created by an anonymous Japanese man that was digital but could be used to purchase things, yet no one knew how to really get it. People back then who were gifted Bitcoin for various reasons would often scoff at it and quickly exchange it for U.S dollars. Now, one Bitcoin is currently worth $56,000 and many new cryptocurrencies are appearing. Rather than wasting loads of computer power digitally mining it, a process that involves your computer needing to solve increasingly complex algorithms, people can easily buy Bitcoin on CashApp, PayPal, and now Venmo. But the real question is, how did we reach this point, and what lies ahead?

I can’t even remember the first time I heard about Bitcoin; it must’ve been in the mid-2010s. This is when the price really started going into the 100s. I didn’t really even know what it did, and I didn’t understand how a coin could be completely digital. I didn’t pay too much mind to the whole situation but what I do know is that Bitcoin is a decentralized online currency that uses “Blockchain technology” to create online transactions that require no intermediary. I remember there was a meteoric rise of Bitcoin and many other cryptocurrencies in 2017, followed by a heavy crash. The price of a Bitcoin reached a high of nearly $20,000 in December 2017 and stooped to as low as $3,000 by a year’s time. This was because people decided to take their profits and sell off while also investing in other cryptocurrencies instead. After this crash, a lot of people believed that it was over for cryptocurrencies and the whole topic didn’t generate too much buzz in the following years. In 2020, though, all this would somehow change.

Bitcoin went down to $3,500 at the start of the COVID-19 pandemic, but since then, it hasn’t stopped rising one bit, all the way to a high of $64,000 just two weeks ago. A lot of this has to do with the coin, and cryptocurrencies in general becoming more mainstream. A lot of finance apps now allow easy purchasing of cryptocurrencies, many of which just began doing so within the past year. Bitcoin currently has a market cap of $1.1 trillion, which is the total amount of all shares of a stock or currency, a market cap that is half that of Apple’s. Bitcoin has mainly found success due to the anonymity and secureness of the coin. It’s become a mainstay for dark web purchases and also can be used for offshore sports gambling in states that don’t allow it. Many people buy just to invest, many of whom have found great success from it in the past year. Of course, you aren’t required to buy a full coin; you can buy portions of it for any price that you want.

However, many people have looked towards other cryptocurrencies since many may think Bitcoin’s been worn out and it’s unlikely much profit will be gained from it for someone who invests now. One that I really like and have invested a little bit into is Ethereum, which is the 2nd most valuable crypto at $2,300. There’s been more returns in the past year from it than Bitcoin, they go hand in hand with each other, but Ethereum has a couple of separate specifics within the blockchain that distinguish it from Bitcoin. People who don’t think they can profit from Bitcoin will likely invest here instead.

Now my favorite, Dogecoin. What started off as a joke cryptocurrency created to make fun of other Cryptocurrencies, now has a market cap of $41 billion. The coin was worth less than a cent at the start of the year, and spiked heavily in late January up to as high as 8 cents. When it went down to 5 cents, I decided to buy in just to see what would happen. After a while of stagnation, the coin shot up in mid-April, reaching a high of 44 cents on April 16th. The earnings were great to say the least. The story of Dogecoin perfectly encompasses the crypto market, as it makes zero sense and only happened due to the unity of the people. For example, celebrities like Elon Musk and Snoop Dogg heavily advocate for Dogecoin on Twitter, which in part led to the coin’s rise.

The future is unpredictable. As one of the most volatile sectors of the market, cryptos could go to unseen heights or crash all together. Whatever happens, cryptocurrencies have made a heavy impact for online markets and digital currencies and I certainly see them being a part of our future.