In a year in which bitcoin has undergone a number of advances, there has been increased focus on whether the digital currency has finally managed to attain mainstream acceptance.
In terms of mainstream acceptance, up to this point, the elephant in the room has remained the fluctuations bitcoin has continued to experience in value. For many people, such continued volatility has proven to be a significant obstacle, while other analysts have been more optimistic.
It certainly cannot be denied that over the past year, bitcoin has experienced a tremendous amount of price fluctuation. One year ago, the value of the digital currency peaked at about $700. Now, one year later, the value has declined to less than $250. On the surface, such a significant price decline might seem as though it would spell the death of bitcoin, but that has hardly been the case. In fact, an increasing number of merchants and retailers continue to jump on board with bitcoin, anxious to tap into the pool of devoted users and even benefit from lower transaction costs.
Does the price of bitcoin matter?
Whether or not the price of bitcoin matters often tends to come down to why you choose to use bitcoin. Merchants typically are not as concerned with the value of bitcoin since they tend to convert it almost immediately to a fiat currency following a purchase. As such, bitcoin is used more as a medium than a currency in retail operations. For individuals who are truly devoted to bitcoin, value has become practically irrelevant since the true value of the digital currency lies in the benefits it offers as an alternative to government-issued currency. Those benefits can be enormous and include the ability to maintain anonymity for payment transactions while enjoying lower transaction fees compared to other options, including credit cards. As such, price really does not even matter. In fact, price really only tends to matter the most to those individuals who fall more into the category of speculator instead of investor.
Bitcoin's price fluctuations may be an undeniable reality, but the declines experienced in value may actually be more proof that bitcoin is settling in another growth stage rather than perishing. Certainly, a decline in price is not good news for the short term, but it is the long term that must be considered when viewing the digital currency's value.
The value of bitcoin may no longer be hovering around the $1,000 mark, but the fact that it has finally settled at a more sustainable level could actually be proof that the digital currency is finally maturing and attaining mainstream acceptance. Now that the speculators have largely exited the space, what is left are those who are interested in the true benefits that bitcoin has to offer rather than just the potential for lucrative overnight profits.
The impact of regulation on the value and future of bitcoin
One area that is having a tremendous impact on the value of bitcoin and may well continue to do so well into the future is the topic of regulations. While many bitcoin devotees have been more than hesitant regarding regulations in the past, the fact remains that regulations are on the way and once those regulations have a clear framework in place, bitcoin could be well on its way to thriving while reaching a greater level of maturity.
Ultimately, the stability and value of bitcoin will be based on the digital currency's ability to attain mainstream acceptance. Given that the volume of bitcoin transactions has demonstrated a distinct rise in the past few months, there is certainly an indication that the digital currency is becoming increasingly popular.