Cryptocurrencies have rapidly garnered popularity over the past few years as a form of digital currency that can be used for online transactions, leading their prices to skyrocket. However, on May 19, cryptocurrency prices hit a bump following a tweet from Tesla CEO Elon Musk where he said that the company would no longer accept Bitcoin, a popular cryptocurrency, as a form of payment due to the increasing use of fossil fuels for Bitcoin mining and transactions. Moreover, the Chinese government banned financial institutions from providing cryptocurrency services.
Nonetheless, cryptocurrency prices have been on a recovery path since then. In fact, Bitcoin prices rose around 4% in the afternoon of May 24, after Elon Musk tweeted that he had spoken to North American Bitcoin miners over the sustainability of Bitcoin, as quoted in a CNBC article. In any case, cryptocurrencies have had a stellar run over the past year. Per data from Coinbase, prices of popular cryptocurrencies like Bitcoin, Ethereum, Cardano and Dogecoin were up way more than 100% over the past year, as of May 28 morning. Adding to that, the cryptocurrency market is also expected to continue a good run. Notably, ReportLinker stated that the cryptocurrency market is expected to reach $2.2 billion by 2026 from $1.6 billion estimated in 2021, at a CAGR of 7.1%, as mentioned in a GlobeNewswire article.
So, what has led to this rapid rise in the demand for cryptocurrencies? The answers are varied but importantly, cryptocurrencies offer a decentralized form of transaction