Bitcoin is a digital currency, with no printing bills and no minting coins. It is decentralized — no administration, institution, or other absolute power (like a bank) restricts it.
Owners are anonymous; Bitcoin links buyers and sellers via encryption keys instead of using names, tax identifiers, or social security numbers. And it's not emitted as traditional currency from the top-down. Instead, Bitcoin is "mined" by powerful web-connected computers. In this article, we look at some of the reasons to invest in Bitcoin.
How was Bitcoin Invented?
In 2009 a person (or group) named Satoshi Nakamoto invented Bitcoin. Hся stated objective was to create "a completely decentralized electronic cash system with no servers or central authorities." In 2011 Nakamoto transferred its source code and domain to others in the Bitcoin community, following cultivation of the concept and technology, and subsequently disappeared.
Moreover, Bitcoin has experienced tremendous growth recently.
Five reasons to invest in Bitcoin Right Now:
1. Bitcoin Acceptance is Growing
Bitcoin's worldwide acceptance heats up. In the year 2020 the number of blockchain wallet users, for example, slowly rose and accelerated since the previous November. Over 12 months, the Bitcoin wallets grew from 43 to more than 62 million.
Also, there are still increasing numbers of people purchasing BTC through the Cash App. Bitcoin sales of the Cash App rose to $1.63 billion during the third quarter of 2020 and, during the same period, the operating profit amounted to $32 million.
Furthermore, PayPal has rapidly monitored their crypto-roll and can now acquire, distribute and retain Bitcoin, Ethereum, Bitcoin Cash, and Litecoin for its users. Crypto transactions are limited to $20,000 a week, twice as much as $10,000 initially reported due to unexpected customer demand. PayPal's 26 million merchants will embrace crypto as a means of payment beginning sometime in Q1 2021.
If the Bitcoin bull market continues to warm, retail and institutional investors could follow this momentum with plenty of ramps. If the demand keeps rising, the market fluctuations of previous Bitcoin cycles might also be even more explosive.
2. The Utility Proposition of Bitcoin is Ideal for The Financial System
The 2009 global financial crisis gave rise to Bitcoin. Bitcoin was secretly deployed in the wild in the background of bankruptcies, government rescues, and quantitative ease, where everyone was forgotten, except for a tiny but growing community of idealists.
A decade back and with further settlements, relatively low-interest rates, and expanded quantitative easing, we see the current financial crisis.
There is increasing recognition of Bitcoin's unique value proposition among individuals and businesses, and where Bitcoin is positioned in this macro setting. Paul Tudor Jones, a prominent macro trader in 2020, said that Bitcoin reminds him of gold’s value in the seventies. He discusses that his Tudor BVI fund has invested between 1 and 2% of its assets in Bitcoin Futures contracts in a paper called The Great Monetary Inflation.
"COVID-19 is a one-of-a-kind virus that has triggered a one-of-a-kind policy response globally," said Tudor Jones.
"It has happened with such speed that even a market veteran like myself was left speechless. Just since February, a global total of $3.9 trillion (6.6% of global GDP) has been magically created through quantitative easing. We are witnessing the Great Monetary Inflation (GMI) — an unprecedented expansion of every form of money, unlike anything the developed world has ever seen," he added.
Satoshi Nakamoto seems to have created Bitcoin for this situation as a potential alternative. Actually, many investors now are considering Bitcoin as a safe haven asset and a hedge against inflation.
3. Bitcoin Keeps Proving The Naysayers Wrong
It is often advised to review the historical price chart before investing in cryptocurrencies. During their entire lives, they have seen multiple ups and downs. Bitcoin was also repeatedly reported as "dead" by sceptics. However, Bitcoin has recently exceeded its historical height. There's no need to expect it won't repeat itself. It might be a lucky year in 2021.
According to Bitcoin price predictions, the leading crypto could reach the $100,000 mark in 2023.
4. Varied Stakeholders
If you believe institutions are the only investors to spend their funds in Bitcoin, you are mistaken! Self-managed super funds, pension funds, and a substantial number of people are now investing in Bitcoin. It is projected that by now, the number of investors is rising. For self-managed super funds and pension funds, Bitcoin is a suitable investment as it could serve best as a long-term investment option.
Over the years, further investment in Bitcoin could be seen by retail investors, which could gain profits as the Bitcoin price may grow in the future. Cryptocurrencies have surpassed all asset groups in the last few months of 2020. This growth is projected to continue in 2021 and beyond, making it an appropriate year for investment.
5. Large Investors are Getting Into Bitcoin
As seen in the graph below, Bitcoin was the most productive asset class of 2020. In contrast, gold and stocks have been crushed.
Bitcoin was the most productive asset class of 2020. Source: Case Bitcoin
In February 2021, Tesla invested $1.5B in Bitcoin and it may start accepting the cryptocurrency as payment in the future. As the news broke, the price of Bitcoin instantly went up by 14% to more than $44,000 per coin.
In August 2020, MicroStrategy, a market intelligence company, reported that $250 million has been spent on Bitcoin buying 21.454 Bitcoin in the form of capital policy distribution. The firm lifted its overall Bitcoin stake to $1.125 billion from August.
"This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash. MicroStrategy has recognized Bitcoin as a legitimate investment asset that can be superior to cash and accordingly has made Bitcoin the principal holding in its treasury reserve strategy," claimed Michael Saylor, the CEO of MicroStrategy.
The entire existence of Bitcoin was marked by dramatic price shifts, “exactly the kind of thing that sustains a long-term trend,” said Citibank analyst Thomas Fitzpatrick, who featured a Bitcoin Map and used previous TA to assess a Bitcoin goal price of $318,000 by December 2021.
"A decoupling of gold from fiat currencies, the COVID-19 pandemic, and the desire for central banks to pursue aggressive quantitative easing policies could lead to future explosive price growth in Bitcoin," claimed Fitzpatrick.
Ready To Invest In Bitcoin?
Bitcoin Price Prediction
Bitcoin is an incredibly unpredictable currency, and its future price is a risk to forecast reliably. Throughout most of the coin voyage, we had many ups and downs; it plummeted almost 50% in Jan 2018 and then recovered much better towards the middle of 2019;
In 2020, it managed to cover less than $10,000 and even went lower than $4000 in the mid-march collapse, and the coin has improved very well since.
Top Bitcoin Price Predictions:
Jeremy Liew is expected BTC to hit $500,000 by 2030, with Peter Smith, CEO and Blockchain's co-founder endorsing their estimate as well.
Mike Novogratz, A former hedge fund trader and fan of crypto-capital, anticipated that the market value of Bitcoin could exceed the $7.5 trillion gold market cap.
Wences Casares, the CEO and founder of Xapo, also trusts Bitcoin. He actually invested in BTC in 2011. During the New York Consensus Conference in 2017, he predicted that Bitcoin would cross $1 million in 5-10 years, which would only be 2023 or eventually 2027.
Chamath Palihapitiya Is the co-owner of Golden Government Warriors and founding partner of Social Capital. His passion for Bitcoin began with his investing quest back in 2012 when he was the owner of 5% of Bitcoin at one stage of circulation. In his forecast for the near term, Bitcoin is predicted to reach $1 million by 2037.
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Virtual currencies are highly volatile. Your capital is at risk.