Bitcoin (BTC) is not only the most popular cryptocurrency but the largest digital asset in the world with a market capitalization of $1.06 trillion.
Here's a brief overview of Bitcoin, the most valuable digital asset, its core areas of business, and – most importantly for prospective investors – the pros and cons that can help answer the question: "Should I buy Bitcoin?"
- Bitcoin at a glance.
- Pros of buying.
- Cons of buying.
- Bitcoin's predictions by experts
- The bottom line: Should you buy Bitcoin?
BTC has returned 95.01% Year-To-Date (YTD) and has crossed several price milestones in 2021 ($35,000, $40,000, $50,000 and $60,000) which has seen the crypto asset bring huge gains to growth investors who made purchases in the month of March and April 2020 when BTC was exchanging hands around $3,800 to $4,800.
With competing altcoins such as Ethereum (ETH), Cardano (ADA) and Tron (TRX) providing smart contracts through their blockchain technologies which see their assets price driven by the performances of several protocols in the decentralized finance (DeFi) space and not merely on speculation (forces and demand and supply), is Bitcoin a digital instrument which can still make gains for new investors?
With Bitcoin average transaction fee currently at $14.35 while Tron (TRX), Cardano (ADA), Stellar Lumens (XLM), Dash (DASH), Ripple (XRP) and Chainlink (LINK) offers average transaction fees which are cents close to $0, should you consider buying Bitcoin (BTC) when other crypto assets have additional features powering its price can bring huge gains in the future considering they are now trading at a relatively lower price?
Is Bitcoin a good investment and will the digital asset continue to soar in 2021 and beyond? Will the parent crypto succumb to the pressures of extensive government regulation which will see the cryptocurrencies run and value in dollar terms come to an unfortunate end?
At a current trading price of $57,029.05, BTCs price is miles away from the capital several investors have set aside to risk with the hope of earning rewards.
Inasmuch as BTC is relatively expensive when compared with other altcoins which are trading below $2,000, current data about risk/reward favours the cryptocurrency as an asset that is yet to attain its highest value, thereby making it a good investment prospect in the future.
The current Reserve Risk for Bitcoin is 0.008. As an investor (crypto enthusiast), one of the areas you should always look out for when assessing an asset’s price is its Reserve Risk position.
Since you are not a holder of the asset and merely researching its potential, it’s extremely important that you get to know how current holders of the cryptocurrency view the digital asset.
To be able to know the future price patterns of the asset, you must understand the sentiments of holders in terms of buying more or selling the crypto asset and the overall outlook of the cryptocurrency market as part of meeting their investment goals.
Reserve Risk, therefore, allows you as an investor to visualize the confidence amongst long term holders of Bitcoin relative to the price of the cryptocurrency at a given point in time.
When the confidence of holders of BTC is high and the price is low depending on how the market views it, there is an attractive risk-reward pattern that signals BTC is in a green zone and thus a profitable investment instrument.
In such a situation, the reserve risk is low and has historically generated outsized returns for several investors. This is a template novice investors must use as a guide to help their trading and investment decisions.
On the other hand, when the confidence of holders of BTC is low and the price is high depending on how the market views it, there is an unattractive risk-reward pattern.
According to Glassnode, “The reserve risk of 0.008 is well short of the highs above 0.02 which was seen during the bull market frenzies of June 2011, December 2013 and December 2017”.
The 0.008 reserve risk technically communicates confidence messages to potential investors which stand at a relative high to the cryptocurrency’s price.
The price may look relatively high to potential investors but when more Bitcoin days (quantity of Bitcoin multiplied by the number of days since coins were moved from one user wallet to another) are created than being destroyed, this means more people are holding onto their BTCs.
Considering the asset as a store of value and not just transactional digital currency, holders have a view of seeing the asset being worth more in the future than its current trading price.
Several experts in the investment space such as founder and CEO of Vailshire Capital Management, Jeff Rose have weighed in on the future of the parent crypto.
In a tweet on Monday, March 22, 2021, he pointed out that “This metric suggests the current bull market still has a long way to run in terms of price increases”.
According to the Chief Operations Officer (COO) and co-founder of Stack Funds, Matthew Dibb, in the last 24 hours up to the time of writing this report, there has been roughly a little under $1 billion in liquidations in the purchase of Bitcoin.
Although a relatively smaller value, it explains the $58.04 billion trade volume experienced on the digital gold in the last 24 hours on exchanges and brokerages.
Such bullish signal is what has prompted several fund managers and major investors to weigh in on the future prices of the cryptocurrency.
Major Bitcoin-buyer who also serves as the CEO of MicroStrategy, Michael Saylor has opined that “The BTC price will climb far higher, along the line it would flip and subsume the entire gold market”.
Speaking with CNBC ahead of MicroStrategy (company which provides business intelligence, mobile software and cloud-based services) announcing it had added a further $1 billion worth of BTC to its already sizable holdings.
Michael Saylor believes BTC will stop being volatile once it crosses the $10 trillion milestone in terms of capitalization and will eventually grow to $100 trillion in the long term.
In the future, the major BTC buyer foresees the crypto trading asset subsumes negative-yielding sovereign debt as well as other monetary index.
Anthony Pompliano serves as a Partner of digital asset hedge Fund, Morgan Creek Digital and in 2019, he predicted BTC to have at least $100,000 in the near future.
Such price valuation is also supported by the former communications director of Donald Trump and hedge fund manager, Anthony Scaramucci who has opined that in the next 12 months, Bitcoin (BTC) could trade for at least $100,000.
With Bitcoin crossing several milestones which has seen it hit an all-time high of $61,683.86 on 13th March 2021; there are currently three milestones ($70,000, $80,000 and $90,000) which precede a $100,000 price valuation.
Investment expert, Jeremy Liew of Lightspeed Venture Partners known as the first person to invest in Snapchat (social media), sees $100,000 is the minimum price Bitcoin (BTC) will have in the foreseeable future.
As far back as 2017 during the crypto boom before BTC reached its then all-time high of 19, 783.21 on December 18, 2017, Liew spoke with Business Insider in the month of May and pointed out that “Bitcoin price can realistically reach $500,000 by the end of 2030”.
Such a price forecast was supported by the CEO and co-founder of the world’s most popular Bitcoin wallet (Blockchain), Peter Smith.
Inasmuch as cryptocurrencies are volatile and BTC seems to have lost 7.59% of its all-time high (ATH) price, various indicators are pointing to bullish patterns for the asset which makes the digital currency an asset you should consider worth your hard earned fiat currency in terms of investments.
Bitcoin (BTC) Cryptocurrency at a Glance
An anonymous man who goes by the pseudonym Satoshi Nakamoto created Bitcoin (BTC) to spearhead the new form of currency which directly competes with fiat currencies (United States Dollar, Great Britain Pound, Euro, Japanese Yen, New Zealand Dollar, Australian Dollar and South Africa Rand) after the 2008 financial crash and released the cryptocurrency in 2009 after a crash of the housing market.
The primary purpose for the creation of Bitcoin was to eliminate the middleman (traditional banks, clearing houses and insurance companies) through the use of a decentralized ledger called blockchain.
The supply of Bitcoin (BTC) is finite and capped at 21,000,000 with the circulation supply of 18,663,081 representing 89% of coins mined.
The first major users of BTC were black markets such as Silk Road (an online market and the first modern darknet, best known as a platform for selling illegal drugs) which made off with $214 million.
Bitcoin (BTC) first started trading in July 2010 at a price which ranged from $0.0008 to $0.08.
Since that time, investors have had an awesome ride in terms of great rallies and unforeseen plunges of the cryptocurrency.
This left several investors with huge gains one moment and losses in the other all within a short period of time.
There have been multiple reports of scams and fraudulent activities taken over the ecosystem of BTC coupled with the absence of regulation which further made way into the crypto assets volatility price patterns.
In spite of these pullbacks with an uncertain future ahead for the digital asset in the strictly regulated financial world, Bitcoin performed absolute miracles and has so far outpaced several price forecasts by investment gurus resulting in unpredictable price bubbles.
As per data retrieved from CoinTelegraph, on the 1st day of January 2011, Bitcoin was worthless, had a price of $0 but closed December 31 with a trading price of $1.
The $1 price was maintained throughout the month of February and March and the first 21 days of the month of April before reaching $2 on 22nd April 2011.
It peaked at $32 on 6th June 2011 (3,200% gains in price). Such a steep ascent in a space of three (3) months was followed by a sharp recession in the crypto finance space which saw the digital gold fall into near extinction zones at $2 on 17th October 2011.
Bitcoin started the 1st day of January 2012 at a price of $5, a substantial increase from its new lows in October 2011 and closed out the year on December 31 at trading price of $13.
The first cryptocurrency to reach $1 trillion in market capitalization began in 2013 with a price of $13, and ended the month of February with a new all-time high of $35.
Bitcoin (BTC) crossed the $50 price milestone on 17th March 2013 and closed the month of March by surpassing the $100 mark to close at $104.
The parent crypto reached $230 in April and after going through a bearish period, recovered and closed December 31 2013 at a trading price of $816.
After starting 2014 on a strong side after crossing $1,000 in the month of January, BTC plunged to $315 to see out the year on December 31.
After maintaining its price through 2015 and 2016, what was to follow the crypto-asset could not be predicted by anyone as a price bubble occurred in 2017.
Such a huge surge in price was attributed to more people gaining extensive education about the possibilities of cryptocurrencies and blockchain technology in general.
On the 1st day of January 2017, Bitcoin (BTC) traded at $1,017, experienced a slight period of decline and went on to hit a high of $20,089 in December 2017, eventually declining further to close out the year with a price of $13,455.
After such an impressive performance in 2017, Bitcoin gains which should have become a positive for the traditional and decentralized finance world as to new and improved ways of going about business transactions, led to a downward spiral in the performance of its price in 2018.
The crypto assets' new all-time high obtained due to high volumes of crypto trading was too much of a price to be held by an unregulated asset as per the analysis of several regulatory bodies across the globe.
Several governments in the world, in particular, the second-largest economy in the world China, banned the trading of all forms of cryptocurrencies in September 2017.
To add salt to injury, Japan which had earlier on opened its arms to the idea of the revolution of digital currencies so much that Binance (BNB) set up an office in the country after China’s ban decided to go against cryptocurrencies in 2018.
In the 1st quarter of 2018, Japan’s Financial Security Agency (FSA) announced that “With effect from June 2018, there will be an outright ban on all cryptocurrencies which provide a sufficient degree of anonymity”.
Considering the whole idea of a decentralized world is to maintain privacy in our financial lives, BTC had fallen to some form of authority centrally which did not bode well for its future price forecast.
Aside from this, there was great news for the whole decentralized finance space which would help lead to mainstream acceptance of digital products. Fortunately and unfortunately, such technological activity was going to deepen discussion as to what cryptocurrencies can surpass Bitcoin (BTC) and challenge its first mover advantage in terms of price and market capitalization.
Several developers decided to compete with BTC for the greater share of the decentralized market and built digital currencies and protocols which are collectively known as alternate coins (altcoins) or tradable tokens.
As several HODLers (long term investors) of Bitcoin (BTC) raked in thousands of dollars in gains, coupled with miners using their expertise in validating nodes to also rake in significant profits, Bitcoin (BTC) hit a wall and succumbed to regulatory and mainstream adoption pressure.
Questions about how credible the digital currency is coupled with the scalability issues associated with blockchain technology as per research done by Deloitte (one of the top four accounting firms globally), BTC was miles away from being accepted in the mainstream as a legitimate transactional currency for business activities.
Evidently, Bitcoin (BTC) began the 1st day of January 2018 with a trading price of $14,754 and ended the year exchanging hands for $3,747 (a decrease of 74.603% of its opening price for the year).
The New Year 2019 saw an increased interest in digital financial products and BTC still remained the first asset of choice for new and experienced investors when it comes to crypto.
Increased interest on the cryptocurrency reflected in its daily trade volume. Activity on the asset began to see price soar and BTC was destined to finish 2019 at a relatively better price than it traded for at the end of 2018.
Bitcoin started the 1st day of 2019 with a trading price of $3,961 and closed the year at an impressive $7,192 (gaining 81.57% for investors).
After 2019, there was a great future ahead for existing and relatively newer cryptocurrencies as well as tradable tokens until the public health crisis shut down the whole financial markets.
This led BTC to plummet substantially to price ranges which reflected its closing price at the end of 2018 in the month of March 2020.
According to Forbes and Coin Metrics, on March 11 2020, over 281,000 BTCs were sold by owners who could not see a recovery of the cryptocurrency’s price in the long term after holding the digital asset for a period of 30 days.
Paul Vigna of Wall Street pointed out that the huge sell-off by investors “Was twice the size of the plunge in stocks”.
After starting the 1st day of January 2020 with a trading price of $6,966 and exchanging hands for $10,360 on 13th February 2020, Satoshi Nakamoto’s decentralized asset ended the month of March around $3,800.
After discussions about how to revive the global economy and subsequent government policy which brought about the Stimulus Package, Bitcoin started to accelerate substantially after renewed interest globally in the price of digital assets which did not have any central regulation.
Accordingly, payments of the Stimulus Package saw a rebound from the lows suffered by the whole financial sector. This saw BTC cross the $20,000 price milestone, eventually closing December 31 2020 at a price of $29,389.
In 2021, Bitcoin (BTC) has crossed several price milestones and the surprise of all is its current trading price range of $53,827.71 and $57,122.76 which has been made possible by a number of factors.
Before the plummeting of the cryptocurrency as a result of the pandemic, BTC normally rode on speculation and the basis of demand and supply from most crypto-enthusiasts who act at its fans, but 2021 has been different.
There has been a huge influx of cash from investors associated with large scale institutions such as pension schemes, investment trusts and university endowment funds.
Grayscale (the largest digital asset management firm) and Tesla (electric cars, solar and clean energy) have led the purchases with Tesla’s announcement of $1.5 billion investment in the cryptocurrency, certifying BTC as not only a first mover, but the cryptocurrency of choice for well-established institutions.
Tesla also adopted BTC to be used by its customers for purchasing Tesla related products.
Bitcoin (BTC) has performed exceedingly well and if it is regulated well whether it increases or falls in price, the price will always go up because new investors will buy the dip with the hope of seeing an increase in the assets price in the near future.
Pros of Buying Bitcoin (BTC)
The pandemic affected every industry in the world and cryptocurrencies were not spared as prices tumbled with Bitcoin leading the bulk.
In 2020, the market capitalization of the decentralized finance space was below $500 billion during the peak of the pandemic which was supposed to be bad news for the pioneer of cryptocurrencies.
In fact, it was not as BTC saw gains from new areas of institutions which have propelled it to new highs in the months of February and March 2021.
There are several pros of buying Bitcoin which is basically down to the drivers of the coin’s price.
Bitcoin has gained institutional interest in terms of adoption over the years
Traction with online retailers saw the digital asset surpass $1,000 on 10th January 2014.
This brought exposure to BTC as a transactional currency which saw Overstock announce the adoption of the cryptocurrency for purchases in January 2014. The company eventually sold $124,000 worth of goods via BTC in the first 21 hours of the announcement.
It has been clear for some years now that BTC was accepted as an option of payment for several firms but most of them were extremely difficult to define since they were primarily online which brought doubts as to its legitimacy.
In October 2020, PayPal accepted Bitcoin (BTC). PayPal has over 26 million merchants which use PayPal for their business transactions. Including BTC as an option of payment aside Bank Transfer, VISA and MASTERCARD will go a long way to help grow the sector.
PayPal’s CEO in the process pointed out that “The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly”.
PayPal is a payment giant with over 346 million users and accepting a digital currency which has sparked debates and regulations means BTC has come a long way to be accepted in the mainstream as a transactional currency that can also be used as a store of value.
Such mainstream adoption boosts an assets valuation as BTC began the 1st day of October 2020 with a trading price of $10,577 and ended the month after the announcement on 31st October 2020 with a price of $13,762 (30.1125% increase in value).
On 24th March, 2021, Chief Executive Officer (CEO) of Tesla, Elon Musk tweeted that “You can now buy a Tesla with Bitcoin''. Customers outside the shores of the United States will be able to buy Tesla later in 2021 but he did not specify the date.
After the announcement, the price of BTC made 4.7% gains to a trading price of $56,360 around 4:20 a.m.
This certifies the importance of mainstream institutional adoption of cryptocurrency.
There have been many adoptions but having one of giants in the technology use BTC as a transactional currency go a long way to communicate to investors the long term potential of the asset if more established institutions adopt it for use in their business operations.
Unlike other cryptocurrencies with unlimited coins which run into the billions, Bitcoin (BTC) Has a Finite Supply. Despite the printing of money by financial authorities yearly, money (fiat currency) is still scarce.
As a result, it has value in the eyes of individuals and business organizations. An asset such as gold has been consistent in its price as a result of being a scarce metal. Scarcity brings about the law of economics which normally sees an asset’s price go up in the process.
Bitcoin was dealt a favour by the anonymous Satoshi Nakamoto as he capped the supply at 21 million. Despite all the purchases which have been made over the past year as the market looked to recover, 89% of BTCs have been mined which stands at 18,663,506.
After the remaining 11% has been mined, that is where the real value of BTC as a store of value will take shape. By being scarce, holders of the digital asset will be willing to sell at prices which are set forth by them.
In the process, due to its value and its future promise, more people will be willing to buy Bitcoin (BTC) at a price they are willing to pay.
This may in the long run see Bitcoin, the crypto asset, soar to new heights such as what some analysts are predicting, $100,000, $500,000 or $1,000,000.
There is an unclear future, but with a view on the basic laws of demand and supply, its finite supply will lead to some form of increment in the price of the asset.
Read Also: 5 Reasons to Invest in Bitcoin in 2021
Bitcoin Is Listed On All the Major Cryptocurrency Exchanges And Some Online Payment Platforms
Bitcoin trades on Binance, Huobi Global, Bybit, BitZ, OKEx and eToro and it is featured on payment platforms as an investment option.
PayPal and Skrill list Bitcoin as a tradable asset that can be sent, received as well as purchased and stored on a digital wallet for as long as the asset will take investors.
Considering SKRILL has over 40 million users added to the 346 million by PAYPAL, nearly 400 million potential investors would be exposed to the idea of purchasing BTCs and holding them in an extremely secured environment they trust.
This is the reason why the digital asset receives such numbers in trade volumes. As at the time of writing, BTC had a trade volume of $58.04 billion in the last 24 hours.
Exchanges receive millions and billions in transactional volume daily and this will go a long way to give some form of insurance to investors that there is activity on the asset which would see it move further in price or bottom out for a certain period of time.
For the time being, BTCs volume signals an increased interest and a long term potential in the price of the asset still, considering the awesome trading price it already commands.
The RESERVE RISK favours the long term outlook of the cryptocurrency’s price
At the time of writing this article, as per an article presented by Coindesk on the future of BTC, the digital gold had a reserve risk of 0.008.
Having a reserve risk which extends far beyond 0.02 signifies a future red zone pattern for an asset which should not be bought and below signals a green zone which means an asset can be bought.
Reserve Risk is used to access the risk/reward ratio of investment based on the confidence of HODLers (long term holders) of an asset.
To calculate reserve risk, you need the price of Bitcoin and HODL bank.
HODL Bank is summing up the aggregate US dollar amount of the opportunity cost of holding on to BTC and seeing it as a store of value which will appreciate in the future than it’s currently trading for, while a holder could have sold it off for profit.
HODL also plays an invaluable role in helping investors know the level of confidence holders have in the crypto asset.
It does not matter if the price of BTC is high but the level of confidence of holders is low, such a pattern means the investment is an UNATTRACTIVE RISK/REWARD adventure.
On the other hand, if price is low and the level of confidence of holders is high, such a pattern means the investment is an ATTRACTIVE RISK/REWARD adventure.
Mathematically, reserve risk = Price of Bitcoin (BTC) / HODL
At a reserve risk of 0.008, BTC is a good investment and worth buying since a low reserve risk has historically led to astronomical returns for investors who make a purchasing decision.
Bitcoin (BTC) has gained new fans that are credible large scale institutions and well-established businesses.
Before the financial crash of 2020, Bitcoin was merely a speculative asset that did not have any strong adoptions or integrations to back its constant fluctuations in price.
This led several analysts to feel the cryptocurrency will collapse when there is strict government control since it could be used to send money to anyone no matter where they are in the part of the world which cannot be tracked.
Since July 2020, Bitcoin has seen publicized interest in the asset as a store of value with Grayscale, Tesla, MassMutual and Dubai-based FD7 Venture featuring strongly in the asset’s rally in the previous months.
FD7 Ventures is a billion-dollar cryptocurrency investment fund which has offices in Dubai, United Arab Emirates and Toronto, Canada. FD7 held $750 million in Bitcoin holdings which helped propel the price of the asset proportionately.
FD7 Ventures sold a small part of its BTC holdings after making huge returns to invest in other altcoins, Cardano (ADA) and Polkadot (DOT).
Tesla announced a $1.5 billion investment in the cryptocurrency on 8th February 2021.
Bitcoin (BTC) opened the day at a trading price of $38,886.83 and closed at $46,196.46 (18.79% gains in less than 24 hours).
Bitcoin (BTC) eventually finished February exchanging hands at $45,137.77 after crossing the price milestone of $50,000 and reaching a new all-time high of $61,683.86 on 13th March, 2021.
Grayscale is the largest digital asset management firm which allows investors to speculate on BTC without having to make direct purchase of the asset. This helps eliminate the need to organize the safe storage and custody of the digital asset.
More importantly, it helps investors to complete large buy orders with minimal slippage (since it provides on-time data) compared to centralized crypto exchanges which oftentimes lack the sufficient liquidity needed to carry out transactions.
Grayscale has in excess of 649,130 BTCs and all orders completed by investors have a direct correlation to the price of the largest cryptocurrency by market capitalization.
In December 2020, Insurance giant MassMutual joined the BTC club with a $100m investment which was for its Insurance’s General Investment Account. The Insurance Company bought the crypto through New York Digital Investment Group (NYDIG) certifying the coin’s gradual appeal and presence in the financial world.
Major exchanges, well-known corporations, favourable reserve risk and adoption as a transactional currency bode well for the cryptocurrency and serve as features which could drive the price of Bitcoin further up.
Check Out: Why Bitcoin Is Going To Explode In 2021
Cons of Buying Bitcoin (BTC)
According to several analysts, BTC is not worth its price because unlike other cryptocurrencies which has built great blockchain technologies which can be adopted by businesses as a solution to their inefficiencies with regards to operations, BTC so far only acts as a transactional currency and a store of value.
There are many negatives and cons of buying Bitcoin but among others,
The price of BTC Is Too High
Bitcoin is currently trading between $53,827.71 and $57,122.76. At such a price, only institutional investors can afford.
You may be an investor who is an average JOE, a regular worker (middle income class) and with the volatility associated with the cryptocurrency, you stand a chance of losing a substantial amount of your money which cannot be recovered, since it is highly decentralized.
Trading and investing in Bitcoin unlike stocks or even some crypto assets which have a core team that is visible enough to investors with roadmaps of the milestones which needs to be accomplished within a given period of time, BTC thrives on its first-mover advantage and huge money from well-established institutions.
Once you purchase a full Bitcoin and not a fraction, you will have to hope that a bigger institution with billions of dollars will invest huge sums into the cryptocurrency as a store of value to see its price move up so that you can see real returns on your investment.
Inasmuch as trade volumes play an integral role in determining the future price of an asset, it’s a relatively unseen determinant and plays a partial role in the overall valuation of an asset.
This is because a couple of $100 trades and investments by millions of people trying to make something out of their hard-earned fiat currency would add up to a substantial figure within a given period of time. This does not mean, it would be able to move the price the way you may expect as part of your investment goals.
BTC is an overvalued asset and several HODLers (long term holders of the asset) are waiting for more institutional investment before they join the selling queue so that they can also make returns as growth investors.
Bitcoin Faces an Infinite Competition from more advanced blockchain technologies
There are currently over 1,000 cryptocurrencies and tradable tokens on the market. Cardano (ADA) and Tron (TRX) are two cryptocurrency projects which have tagged themselves as “Ethereum Killers” as they aim to claim the largest share of the decentralized finance (DeFi) space.
Do not forget Ethereum (ETH) employed the longstanding SHA-256 algorithm (proof-of-work) originally used by Bitcoin (BTC) and decided to upgrade its system to Ethereum 2.0 by opting for a proof-of-stake system.
This means BTCs blockchain is relatively outmoded despite several forks which has led to the creation of Bitcoin S.V. and Bitcoin Cash (BCH) scaling relatively faster than the parent crypto.
With a whopping $41 billion locked in DeFi projects as per data retrieved from DeFi Pulse (an online portal that provides the latest analytics and rankings of DeFi protocols) and other cryptocurrencies such as Stellar Lumens (XLM) and Ripple (XRP) offering cross-border payment solutions through their technology while Polkadot (DOT) offers interoperability services for all blockchains and Chainlink (LINK) offers real-time data on-chain, the future of BTC will still hinge on speculation and popularity rather than real world impact.
Bitcoin and Ethereum lead average transaction fees with BTC taken as much as $14.35 while other altcoins such as Tron, Cardano, Stellar Lumens, Bitcoin Cash and Ripple have fees which do nothing to the personal savings of someone living below the poverty line.
Heavy Regulation From Global Financial Bodies May Set In.
As more developers try to cash in on the crypto boom, more governments with their regulatory bodies will intervene in the decentralized space to try and bring some centralization into the process in order to ensure the financial safety of their citizens.
China outrightly banned cryptocurrencies, Japan followed and in the first two weeks of the month of March 2021, news from India points to the direction of a cryptocurrency ban in the near future which has brought a lot of heat in terms of discussion on several financial investment websites.
As analyst David Butler of Motley Fool puts it, “At the end of the day, no government is going to allow their currency to play second fiddle to something as completely speculative as Bitcoin”.
BTC can make you money but it can also deplete your funds. At its current price, if you are an investor with small funds, it may be wise to do an extensive research (fundamental and technical) and settle on other altcoins which are relatively cheaper and promise great returns in the future based on its blockchain networks adoption by real world institutions as a business solution.
This will help you to spread the risk, in this process you diversify your portfolio with other assets which have the potential to make up for any future loss which may come your way.
What are Analysts and Experts Advising on Bitcoin (BTC)?
Every price forecast made by several expert analysts, BTC has found an incredible way to surpass it leaving early sellers in the dust as to why did I sell it?
In August 2020, Bitcoin hit $10,000 and several investors sold the coin with $8,500 at the time providing most of the resistance until it soared to $20,000 in December 2020. At this price, several investors felt a huge sell-off was on the way and to their astonishment; the current price of Bitcoin as at March 2021 is trading above $50,000.
As Clem Chambers puts it, “The coin may be worth $1 million someday or may drop down to the normal price levels many people expect it to. This is because its price is being heavily influenced by personal FOMO (Fear of Missing Out) and corporate FOMO and until that impulse passes, nobody can really determine the price of the digital asset”.
Former naysayer, JP Morgan believes the coin’s price will hit $100,000 someday.
Bitcoin Investor Mike Novogratz forecasted a price of $10,000 for BTC by 2018 and his prediction was spot on. The analyst has opined that “Bitcoin would easily surpass gold’s market cap within the next ten (10) years.
Analyst at Saxo Bank, Kay Van-Petersen believes “Bitcoin will rise to $100,000 per unit by 2027”.
Wealth manager for California-based investment advisory firm WESCAP, Andy Edstrom, foresees a market capitalization of $8 trillion for Bitcoin (BTC) in the long term.
Founder and Chief Executive Officer (CEO) of Xapo, Wences Casares is extremely optimistic and foresees BTC hitting $1 million sometime before 2027 at a Consensus Conference in New York in 2017.
Founder and partner at Morgan Creek Digital, Anthony Pompliano has predicted BTC to exchange hands at $250,000 by 2022.
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Where do I Invest in Bitcoin (BTC)?
As part of our core competencies as an e-learning organization, it is our primary responsibility to ensure we provide credible brokerages and exchanges to our clients and readers.
eToro is the brokerage of our choice because it ticks our boxes in terms of security, scalability and authentication. As a result of the controversies associated with the trading of BTCs, we believe eToro provides the best platform which will meet your trading needs.
The Bottom Line: Should You Buy Bitcoin (BTC)?
There is no digital asset that is perfect and Bitcoin is no different. As a result of being a first mover (pioneer) in the crypto finance space, Bitcoin has an incredible competitive advantage in investments and adoption as a transactional currency.
If you're holding for the long term and want to own one of the most compelling digital assets, there's nothing wrong with buying some Bitcoins now and simply for peace of mind and adding more if it pulls back.
Several stakeholders of the coin are doing everything possible to maintain it as a store of value for investors. The primary asset of choice in crypto trading has served as a hedge against losses and has helped several individuals and organizations grow their investments.
Currently, Ethereum (ETH) and Tron (TRX) seem to be the main challengers to BTCs dominance in the crypto trading space. Unfortunately, they have not positioned themselves well in terms of long-term investor confidence which still sees them trade for less than $2,000. BTC at its current trading price still has technical and fundamental analysis which backs it as a BUY.
As per the findings of a study done by the University of Cambridge, there were 2.9 to 5.8 million unique users of cryptocurrency wallets and not-too surprising, most of them were using Bitcoin (BTC) in 2017.
If anyone says Bitcoin and cryptocurrencies cannot make you money, the person is telling lies. Bitcoin (BTC) has created multi-millionaires several times during its crypto boom days in 2017, 2020 and currently, 2021.
But the prices those buyers purchased the crypto asset were relatively cheaper than its current price which has placed a rush for the new golden goose (altcoin) which will bring investors huge gains after missing out on the returns of the parent crypto.
For the time being, BTC remains a speculative asset which can as per the words of Danny Cox from Hargreaves Lansdown (a financial services company) “Remain niche, vanish without a trace, become mainstream or anything in between. Any investment should be considered as very high risk”.
Conservationist, philanthropist and hedge fund manager Paul Tudor Jones in the second quarter of 2020 purchased Bitcoin as a hedge against inflation as central banks around the globe started printing money and compared the digital coin to the gold trade in the 1970s.
Perhaps, you can follow the hedge fund manager and purchase a small stake in the cryptocurrency as a hedge against potential losses in other investments.
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Virtual currencies are highly volatile. Your capital is at risk.