BITCOIN – A NEW GLOBAL CURRENCY, INVESTMENT OPPORTUNITY OR SOMETHING ELSE?

The history of bitcoin started in 2008 when the article “Bitcoin: A Peer-to-Peer Electronic Cash System” was published under the pseudonym Satoshi Nakamoto. Since then the bitcoin has undergone significant changes marked with rapid growth and decline of its value, accompanied by public attention. The bitcoin is a system based on complex cryptographic algorithms without central authority that releases money or monitors transactions. There are discussions over the issue whether bitcoin could possibly become a new global currency that would not be affected by inflation and would not be influenced by central banks. Decentralization and unregulated system were considered as its biggest advantage. However, it proved also to be a major cause of its great volatility since the bitcoin price depends on the relationship between supply and demand. This paper analyzes the role of the bitcoin on the financial market, profitability of bitcoin investments, and the future of this cryptocurrency. Based on the facts of the essence of bitcoin and using technical analysis, it has been found that the value of bitcoin will decrease in future, therefore it does not represent a good investment opportunity. Furthermore, it has neither future as a secure means of preserving the value, nor as a global currency. However, there is a possibility that the bitcoin will impose itself as a reliable and inexpensive way of money transfer.