Cryptocurrency may not be a currency, but it has been used to serve most of the practices carried out by currencies in recent years. Some of the most common include being used as a tender for selling and purchasing goods and services and as a store of wealth. According to most experts, when Bitcoin was introduced and started gaining value, it was identified and given the name Digital Gold. Some of the reasons why this happed include that Bitcoin could be used as a store of wealth and serve all other practices gold served, but with better efficiency. Bitcoin could be used for transactions and was easily portable and divisible compared to gold. As time passed, the value of Bitcoin rose, and people wanted a piece of the action.
Since Bitcoin has proven to be a good store of value and wealth, many people have been using it to store their savings in one way or the other. Considering the situation in the world and the increasing inflation rate all over, people prefer to save their money on platforms they trust and where their money will not lose value over time. And since Bitcoin has proven to increase in value year after year, this was the best option for many people. As a result, the number of people who use Bitcoin as a store of wealth has been increasing year after year. This includes both whales, people, and organizations with huge amounts of cryptocurrency stored on various platforms and small accounts holders of people saving the little they have saved up.
Due to the huge savings made in Bitcoin, 64% of Bitcoin supply has been stored up by these holders on various cryptocurrency platforms. In the last year or more, this percentage has proven to be a cause for concern or an opportunity for investors who would like to make money in the process. According to CoinMarketCap, the total supply of Bitcoin in the market is 19.01 million Bitcoin. Investors are holding over 12 million Bitcoin, meaning that the supply of Bitcoin in the market is low and getting lower with every passing minute as more people save their money and wealth in Bitcoin.
According to the law of equilibrium, which helps set the prices for commodities, the price will increase when the demand for a commodity increases but the supply is low. This is one of the reasons why Bitcoin is one of the best investment opportunities at the moment. In a few months, the demand for Bitcoin will most likely increase as more people decide to save their money in Bitcoin rather than fiat currencies. When this happens, and you already have Bitcoin in your wallet, the value will increase, and you will make huge profits from this. But although this is a huge opportunity, there is a risk as well. According to the low equilibrium, if the supply exceeds demand, the commodity’s price falls. In case one of the whales or many whales decide to cash out from Bitcoin, the supply of Bitcoin in circulation will increase. The increase will cause the value of Bitcoin to fall and affect the investors.
