Whether you're new to Bitcoin Investing, thinking of getting back in, or just want a refresher on why invest in Bitcoin — this article is for you.
Bitcoin is the most popular and the highest-priced cryptocurrency in the world today. It is a digital currency created back in 2009 by an anonymous developer Satoshi Nakamoto.
Bitcoin works on a decentralized platform and records all of its transactions on a public ledger available to all users. This currency aims to eliminate the need to have a central agency like governments controlling financial systems and the desire to have a system that allows faster cross-border payments at low transaction fees.
Bitcoin's price has been rising steadily since it was created and gained a lot of popularity. If you are looking to invest in Bitcoin, you are not alone.
Many crypto investors monitor the trend of this coin throughout to make returns from its volatility. While not everyone has the guts to invest in BTC, those who follow the crypto market trends keenly have made immense profits.
Should you invest in Bitcoin, you need to know how to study the market so that you can determine profitable entry and exit points. You can also choose to go long-term by buying and waiting for the price to rise. A period of six to twelve months is sufficient to make a good return if you invest substantially as long as this coin’s price keeps going upwards.
Below we cover 15 major reasons why you should invest in Bitcoin and why Bitcoin investing can be so powerful. First, let's start with the hard fact-based reasons to invest in Bitcoin, and then we'll transition into some less discussed, but still important, reasons to invest.
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15 Reasons Why You Should Invest In Bitcoin Today
There are all kinds of reasons why you might want to invest in Bitcoin — probably some you’ve never considered. Here are 15 that we found.
1. Bitcoin Has Practical Uses
There are more than four thousand digital currencies, but very few have any practical uses. A majority are pump and dump projects designed to steal from vulnerable individuals. Bitcoin is why different from these other coins. It was designed primarily to work as a means of exchange, just like fiat currency works, but now in a digital form.
Conventional fiat currencies are quickly becoming obsolete as more and more people continue taking their business transactions online. The need to work across borders and making quick transactions will need a universal currency that is not under an institution or government.
Bitcoin provides just exactly this with its decentralized blockchain and public ledger. Using the coin for transactions will also eliminate paying unnecessary taxes and fees. That is why the coin has gained such popularity and serves as a good investment option.
2. Investing Is Easy, Precisely And Learning Is Free
Conventional investments take a lot of time to understand the market dynamics to invest. For instance, if you need to invest in the stock market, you need to find reliable brokers, know how to buy and sell stocks, and then find companies whose stocks are listed in the stock market.
It can take a while to learn how to get these stocks and make money from the same due to the existing bureaucracies. Investing in Bitcoin is different.
First, you do not need tons of money despite the existing price of Bitcoin. Bitcoin developers created it in such a way that you can buy just a portion of it. All you need is to find a reliable exchange and create a wallet to keep your portion of Bitcoin.
All the instructions are provided online for free, so you do not need to sign any documents or pay any transaction fees to anyone. You simply buy the portion you can buy, and then wait for the price to go up, sell, and make money. It is as easy as that.
3. First Market Advantage
Being the first in the cryptocurrency market gives Bitcoin an upper hand. Being a pioneer provides this coin with a sort of ‘brand name’, making other coins difficult to compete with in terms of market share and, consequently, liquidity.
Looking at other products in the technology industry, it is evident that those that came first have a lion’s share. For instance, Facebook still dominates there despite several other better and more interactive platforms hitting the market in the social media circles. iPhone is still a market leader for smartphones, even after Android brought about better and cheaper smartphones.
Investing in such dominant brands almost always guarantees you a profit in the long run. Any time people talk of digital currencies, what comes to mind is Bitcoin, which explains its current price beyond its closest competitor. You should take advantage of this brand effect and from it as long as it lasts, and it’s going to last for a long time.
4. Bitcoin Is Indeed The Most Trusted Cryptocurrency
There are numerous digital currencies all trying to carve a niche for themselves. All of them come with new features trying to outdo or reduce Bitcoin dominance, but Bitcoin continues to dictate the digital market trends. Why is this so?
Bitcoin's feature of having just a limited number of coins that can ever be in circulation gives it an upper hand in terms of value. It is an indication of security that someone cannot just create an unlimited number of coins thus dissolving its value.
It is much the same way a central bank can print excess money without a real asset to back up its value. Bitcoin's limited supply gives it more value and has users trust in it more than any other digital currency. This trust continues to push its value upwards, making it the most viable option to invest in.
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5. Bitcoin Is Highly Volatile
All cryptocurrencies are highly volatile. Bitcoin is the most volatile of these digital coins. Volatility might seem like a risky aspect in matters to do with investing, but it is also a way of making quick money as long as you read the market correctly.
There are always many indications online that you can use to predict the direction the market will take easily. Bitcoin keeps on fluctuating depending on market conditions but has some level of stability not present in other digital currencies.
The fact that it moves up and down quickly means that you can make money on these movements. All you need to do is to stay vigilant and determine your entry and exit points. Other coins tend to be dormant that they fail to present you with such opportunities.
You can follow crypto enthusiasts to know when to enter and when to exit the market, but you have more chances of making money with Bitcoin than any other digital coin
6. Bitcoin Is Highly Secure
Bitcoin has one of the most secure systems you will find in any cryptocurrency. The aspect of security is important to both short and long-term investors, but more so for long-term investors.
As mentioned a while back, Bitcoin operates on its decentralized blockchain with all transactions recorded on a public ledger. This feature allows for all members on the blockchain to confirm these transactions.
When you buy Bitcoins or a portion, the seller cannot reverse the transaction once confirmed. You can have your Bitcoins stored in a cold wallet that is not connected to the internet to keep them away from hackers.
If you want to keep them for a long time to gain on price increase, your Bitcoins will be safe on a paper wallet until the time you want to sell them. Even then, you do not have to give out your address publicly, but only to the person, you intend to sell to. This level of security makes Bitcoin a very good option for investments.
7. Bitcoin Has Gold-Like Characteristics
Bitcoin has gold characteristics, but not in terms of the physical aspect of the valued metal. These characteristics are in terms of value.
According to Bitcoin developers, the coins' supply is limited to 21 million, and they expect mining to end by the year 2140. This limited supply of Bitcoin, just like gold, makes it an ideal store of value due to its scarcity. Bitcoin is even better than gold, considering that there is a certainty of its quantity or supply, and all transactions are public knowledge.
On the other hand, Gold is marred with the secrecy with world governments, especially the powerful economies restricting information about how much gold they hold. Another advantage that Bitcoin has over gold is the ease with which you can transfer it from one country to another without government restrictions and without the risk of loss.
All you need to have is a digital address that you can access easily on another computer anywhere in the world. It would cost you a lot of money to transfer gold even from one city to another. It is such features that make this digital gold so valuable and in essence, a good investment option.
Read Also: Bitcoin vs Gold
8. Serious Investors And Billionaires Are Investing In Bitcoin.
If you know the famed cliché, "follow the money, then you know where to place your investment". Billionaires did not become such by luck, but by consistent effort and wise choices.
These people will not invest in just anything after having spent years accumulating their wealth. If you see them investing in Bitcoin, then know that it worth its hype. Examples of such super-rich individuals that are placing substantial chunks of their wealth in Bitcoin include Stanley Druckenmiller, Raoul Pal, and celebrities such as Mark Cuban.
Raoul Pal in particular, liquidated about 98% of his assets just to invest in Bitcoin. If you want to be part of the future billionaires, then this is the path to follow. Even renowned institutional investors are now turning to digital gold since they see where the world's future is heading. Not unless a catastrophic occurrence happens on earth, human life is going fully digital, and Bitcoin is going to be at the center of it all.
9. Very Safe And Traceable
Bitcoin operates on a decentralized platform, and all transactions are recorded on a public ledger. This ideally means that every transaction that is recorded on this ledger can be traced back to its origin. That is both a good and a negative aspect of Bitcoin, but when it comes to security, and then it plays well on you as an investor if you are not into shady business.
The idea that transactions can be traced back to their point of origin means that if you were to lose your Bitcoins to a hacker, they can be traced and arrested, then forced to return your coins if enough evidence is available. This also means that the network is semi-anonymous.
However, that is not a bad thing since its decentralization feature still ensures that no one person can manipulate transactions, like in the case of banks and other payment systems. More so, if you make a substantial investment in this currency, you have the option of securing your coins in cold storage that is not connected to the internet. That way, hackers can never access your wealth, and your coins maintain their value as you wait to trade them for a profit.
10. Financial Regulators Legitimizing Bitcoin
Just a few years back, Bitcoin was shrouded in mystery and darkness. Most people considered it as a currency used on the dark web to carry out illegal transactions.
But as more and more people understand the value and use of this coin, more and more institutions, and significant individuals are now buying this currency, giving it more legitimacy. The US and EU financial regulators are also working to incorporate the currency in the mainstream market.
In the US, the treasury is looking forward to starting taxing digital currency, and especially Bitcoin as property. Once governments begin regulating and taxing a commodity, it is essentially getting legitimacy. You now do not have to worry about investing and losing your hard-earned money with such regulations. There is no doubt that this Bitcoin will continue being a valued commodity, perhaps the most value in most financial markets. Those that will have made good investments in it are bound to gain immensely.
11. Developers Are Making Improvements To Bitcoin
Bitcoin developers are perhaps the most dedicated as compared to all other cryptocurrencies. The team behind this coin has been working throughout its introduction to the world and has managed to go through ups and downs to its current state.
One of the downsides of the Bitcoin network, according to its users, is the slow transaction speeds. As of the moment, this network can perform or complete one transaction in about 10 minutes, which is still relatively faster than most payment systems that can take even 24 hours.
Bitcoin’s developers are working day and night to build a second layer that will enable speedy transaction times. This layer promises to have more transactions completed in a shorter time. The team also has plans to incorporate smart contracts, the same as those that run the Ethereum network.
This technology will enable faster digitization of physical assets and ease the process of transactions. These developments are sure going to increase the value of Bitcoin exponentially and hence the need to invest in it.
12. World Monetary System Being Build around Bitcoin
The world's financial system has been built on Gold since the 15th century. The Medicis started a bank in which they used gold florins to back up paper money.
Backing up means that you could take your gold to the bank, and the bank would issue you with paper money equivalent to the value of your gold. It was untenable to carry gold around for trade as it was heavy and not secure to do so. Now, Bitcoin is slowly replacing the role that gold was playing then.
Since established world banks have total control of the world's gold, they control the financial system forcing people to bend to their whims. Using Bitcoin as a backup wrestles this power from the system and gives it back to the people.
The good news is that a lot of people are accepting this idea since there will be no central power controlling people's wealth. Another impediment to using gold is that no one wants to do the manual and hard work of physically mining and refining gold.
13. The Use of Bitcoin Is Growing Exponentially
The trick with cryptocurrency is the more the users, the more that coins liquidity and the stronger the confidence that people will have in that coin. When a coin is liquid, it means that you can easily buy and sell it when you need to.
There are coins that you have to wait for a very long to find a buyer when you need to sell since they have no practical use. Bitcoin is different. Its users have so much confidence in it that it would take you just hours to find a buyer when you want to sell or, rather, liquidate.
According to Blockchain.com, currently, there are more than 81 million unique Bitcoin wallets created. This data indicates growth from 45 million in January 2020 and 65 million in January 2021. That is a 25% growth in just a year. With such statistics, you do not want to be left behind. Bitcoin still has a bright future as miners continue to mine more of the total supply, and its price is just starting out promising to grow higher.
14. Bitcoin Value Proposition Providing Solutions To The Macro Climate
When Bitcoin was created back in 2009 by an anonymous individual, Satoshi Nakamoto, the world was going through a financial crunch.
At this time, banks were failing, and governments were all over bailing out these banks using taxpayers’ money. People can no longer trust banks to hold their wealth since they consistently breach this trust by debasing the currency and lowering the value of people's wealth.
Having a central unit controlling the masses' wealth is simply creating a small percentage of super-rich individuals at the expense of the majority. Bitcoin is set to topple this order of things by having people store their wealth in a decentralized ledger.
It is taking the role that gold was playing as a store of value before unscrupulous individuals began overprinting paper money in a bid to create more debt that was consequently unsustainable. Printing money above the actual money that people deposit in these banks through quantitative easing is why banks are failing since there is no actual wealth to back up this money.
When borrowers default, the banks are left with a deficit that forces them to declare bankruptcy. This will never happen with Bitcoin, considering that no central authority will have a chance of over-producing Bitcoin. Its value will just keep on growing naturally following the market dynamics.
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15. Bitcoin’s Stock To Flow Model Is Likely To Hold
The concept of stock to flow is used to calculate the scarcity of a particular product. Stock is the total amount of that product in circulation, and flow is the supply available every year.
Bitcoin has a fixed supply schedule, so it is possible to calculate its availability with perfect accuracy, unlike gold and other commodities. After Bitcoin's third halving in 2020, its S2F is equivalent to that of gold at 56. The next Bitcoin halving will now be twice as scarce as gold and way valuable as a metal.
If this prediction model holds, the price of Bitcoin will undoubtedly increase in value exponentially in a few years to come. As an investor, it would be wise to at least have a fraction of the digital currency in your portfolio just in case.
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Virtual currencies are highly volatile. Your capital is at risk.