Bitcoin is one of the most widely used store of value for most people looking to keep their money from deflation and economic woes.

But what if you were told that Bitcoin which have over 600+ billion market capital isn't worth anything ?

Well, that is some people's opinions, people like Warren Buffett who believes that crypto will someday go to zero. His stance is highly debatable but that is a story for another day.

The physical dollar, yuan, pounds, euros that you carry around as a legal tender holds value because it is issued by the central authority of the nation that owns it.

But Bitcoin is different, how can something that can be mined by anyone, anywhere have value ?

There is a lot that goes on under the hood that gives value to Bitcoin some of which are:

The first one is the production cost of one Bitcoin. Bitcoin can be mined by anyone who runs a node and have the sufficient computational power, but it is not that easy.

This mining process consumes a lot of computation power and therefore electricity is highly consumed. This is further influence by Bitcoin halving.

Adoption also affects the price of tokens, has more holders buy the tokens, the demand increases and therefore at low supply, the price is increased.

Economic and geopolitics also play an important role in cryptocurrency prices, this is because due times of crises, the currency on any country experiencing it depreciates and this causes people to utilize crypto as a store of value.

There is no universally accepted way of evaluation of the true worth of any cryptocurrency.

Bitcoin is a store of value and a hedge against uncertainty and economic crisis. This is why everytime the FED makes announcement about interest rate it affects the price of cryptocurrencies.

So just the same way a countries currency have value because it is issued by the central bank, crypto has value because it is derived from an immutable source and backed by nodes running on the Blockchain.

So don't be fooled, cryptocurrencies worth depends on a lot of factors, with proper on-chain research and fundamental analysis, one can tell if a token is undervalued or overvalued.

Hope you learnt something today, I am ticktalker and I always post crypto/educative contents.

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