How liquid is your Bitcoin? It depends upon the quantity of transactions. In stock exchange, the liquidity of a stock depends upon factors such as value of the company, free float, demand and distribution, etc.. In the event of Bitcoin, it appears free float and demand are the aspects that determine its cost. The high volatility of Bitcoin cost is because of less free float and more demand. The value of the digital company is dependent upon their members’ experiences with Bitcoin transactions. We may get some useful feedback from its members.
No members can market Bitcoin if they do not have one. It means you’ve got to first acquire it by tendering something precious you possess or through Bitcoin mining. A large chunk of these precious things ultimately goes to a person who is the original vendor of Bitcoin. Of course, some amount as gain will certainly go to other members who are not the original manufacturer of Bitcoins. Some members will also lose their valuables. As requirement for Bitcoin increases, the original seller can create more Bitcoins as is being done by central banks. Since the price of Bitcoin increases in the marketplace, the original producers can gradually release their bitcoins into the machine and create a massive profit.
Bitcoin Is a Private Virtual Financial Instrument That Is Not Controlled
Bitcoin is a virtual financial instrument, though it does not qualify for a full-fledged currency, nor does it have legal sanctity. If Bitcoin holders set up private tribunal to settle their issues arising from Bitcoin transactions then they might not worry about legal sanctity. Thus, it is a private virtual financial instrument for an exclusive group of individuals. Individuals who have Bitcoins will be able to buy massive amounts of goods and services in the public domain, which can destabilize the standard sector.
If We Wait Until We See the Whole Thing?
This is going to be a challenge to the regulators. The inaction of authorities can make another financial crisis as it had occurred during the financial crisis of 2007-08. As usual, we can’t judge the tip of this iceberg. We won’t be able to predict the damage it could produce. It’s only at the last point we see the entire thing, if we are incapable of doing anything except that an emergency exit to survive the crisis. This, we’ve been experiencing since we began experimenting on things that we wanted to have control over. We triumphed in a few and failed in several though not without sacrifice and loss.