Popularity of Bitcoin. Cause and effect.

The Bitcoin cryptocurrency has shown unprecedented growth over the past few years; the rate of the virtual currency has increased thousands of times.
How did it happen that data in computer memory turned into real money, and its value surpassed the value of gold?

This happened for two obvious reasons - the conditional anonymity of the crypto currency and the massive advertising campaign launched by those who release new crypto currencies.

The advertisement is engine of the trade.

Recently, not a single day goes by without news about crypto currencies, either a large company decided to use this instrument in its calculations, or another state recognized crypto as a means of payment. There's so much news that you immediately get the feeling that someone is profiting from it. On any news site, you can find up to five news stories about the triumphant march of virtual currency around the world.

Analysts' claims that Bitcoin is undervalued are playing a significant role, with the most optimistic forecasts already predicting a price of tens of thousands of US dollars for this cryptocurrency.

Constantly growing demand.

Massive advertising and a rapidly rising price encourage people to actively open Bitcoin wallets. Every new investor hopes to increase their wealth at least severalfold. Moreover, there are thousands of illustrative examples, as the cryptocurrency has increased in price several times in just six months.

The number of active Bitcoin wallets has already reached 10 million, up from 2.6 million four years ago.

As we know, growing demand with a limited supply of a product leads to rising prices. As the number of people willing to buy cryptocurrency grows, so will its price.

What can we expect from virtual currencies in the future?

In the near future, these assets will grow, the price increase will continue for several years, after which a collapse will occur.

Moreover, new products will rise in price even more, since investments in established cryptocurrencies already generate significantly less profit than purchasing new cryptocurrencies.

The rate will still be unstable, with fluctuations reaching up to several percent within just one day.

Why is the forecast so pessimistic?

It's important to remember that cryptocurrency requires significant energy consumption to survive; even now, maintaining Bitcoin requires an amount of electricity comparable to the consumption of a country like Slovenia.

And given the prospects for growth in electricity and the potential shortage, it's not hard to predict how this shortage will impact cryptocurrencies.

For this reason, I would not invest in crypto for more than two years; the likelihood of a trend reversal only increases with each passing day.