Breaking: Recurring droughts in California, which make up some 25 percent of the U.S. population, have translated into financial distress for many in the Bay Area. And many, like the 20,000 residents of San Francisco, are suffering from food insecurity due to the crippling drought conditions.
But unlike the tight correlation between California’s cash flow and the drought, the strong demand for cryptocurrencies has no correlation with the drought in the state. Bitcoin, one of the most popular forms of cryptocurrency, has seen a boom in value over the past two years, ranking among the 10 most valuable cryptocurrencies at $17,765 per token on May 30.
The digital currency was created in 2009 and was initially aimed at digital currency traders and criminals. But as reports of cryptocurrencies flooding criminal networks and Bitcoin being used to launder money began to surface, it’s become increasingly popular with a new demographic—individuals who are interested in engaging in financial transactions that are contrary to current laws.
Indeed, many of those in Silicon Valley who were eager to use the cryptocurrency are attracted to its openness and irreverence in dealing with money, according to CNN Money.
Michael A. Tobin is one of those individuals. Tobin, a 55-year-old entrepreneur from New York City, describes himself as a Libertarian and says he was first introduced to cryptocurrencies after seeing an ad on the news in 2016 and signing up for two online courses on Bitcoin, the largest cryptocurrency.
“I had never dealt with anything like that before,” Tobin told CNN Money. “I remember reading about bitcoins and going on YouTube—it really intrigued me.”
By the end of 2016, Tobin was using a Bitcoin exchange every day to trade. “I was mostly making a few hundred bucks a month.”
Tobin’s luck wouldn’t last for long. On Nov. 17, 2017, the cryptocurrency-selling service Coinbase fell under a hack that saw $20 billion of customer funds leaked.
It was a gut-wrenching experience for Tobin and thousands of other investors who were told they had been cheated and didn’t have any money.
“I found myself yelling at everybody I knew: ‘I’m done with this, we’ve been cheated, I’m dead’,” Tobin says. “I was extremely confused for four months.”
Fortunately, Tobin soon found the recovery from the hacking swift, and he started accumulating coins once again. Although he couldn’t find any way to make his bitcoins last forever, he was able to trade for them at prices higher than he was selling them at. With cryptocurrency prices continuing to rise to multi-decade highs, a new group of investors like Tobin who are prepared to spend their money on Bitcoin is all over the scene.
While there is still a lot of risk involved in investing in the crypto scene, there are a number of reasons to be excited about the future of the digital currency sector. As Bitcoin prices continue to skyrocket, there’s more cash available and users are investing in more digitally-enabled transactions.
Additionally, more investors are putting their money in Bitcoin to aid in the investment in infrastructure for the more digital decentralized blockchain currencies, as opposed to “mining” a cryptocurrency with traditional computers in a large complex of processors and servers.
Garrett Fullerton, head of cryptocurrency for BitByWealth, says bitcoin is moving away from being an unregulated retail sector and into an institutional realm. “The way the markets are constructed, traditional banking and finance are now playing a role in securing crypto assets,” Fullerton told Fox News.