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What Is Bitcoin And Is It Worth Investing In Bitcoin In 2021?

Last Updated November 2nd 2020

All You Need To Know About Bitcoin Investing In 2021

What is Bitcoin and Is It Worth Investing in Bitcoin in 2021?

If you are about to dive into the world of cryptocurrency and want to know what Bitcoin is and if it is worth investing in Bitcoin in 2021, then keep on reading.

As the world of cryptocurrency is constantly changing, we at Trading Education are here to help you stay up-to-date with crypto investing in 2021.

Today, we will introduce Bitcoin and explain how and why it’s the king of Cryptocurrency market. We will also try to answer the following questions -  What is Bitcoin? Is Bitcoin a good investment?” and “Should I invest in Bitcoin in 2021?”

Bitcoin Explained

Bitcoin! One of the most trending words online; one of the most discussed phenomena in the world of finance. But what is Bitcoin?

Bitcoin is the first digital coin created in 2009 by the enigmatic figure Satoshi Nakamoto. As a result of the financial and housing crises in 2008, Nakamoto proposed a digital currency to allow people to make payments easily, fast, and at lower costs.

One of the most appealing aspects of Bitcoin is its decentralised nature – no authorities and no dodge fees anymore.  

Bitcoin runs its own blockchain, which is a collection of blocks or transactions, with 100% equal and transparent access.

To achieve its goals, Bitcoin relies on a strong consensus mechanism and cryptography, different nodes or computers, and miners. As of April 2020, there were more than 47,000 Bitcoin nodes around the globe.

bitocin nodes

Bitcoin was released in 2009 and in over a decade, it has become one of the most popular and traded assets ever. 

The main abbreviation of Bitcoin as a currency is BTC. Despite its volatility - Bitcoin is an attractive investment option.

You might be interested to know that usually, when we talk about Bitcoin as a platform, we capitalise the first letter, while when we talk about the actual currency bitcoin we can use a small letter.

Would you Like to Invest in Bitcoin?

How Does Bitcoin Work?

Know when we know what Bitcoin is, let’s explore how it works and if it is worth investing in Bitcoin in 2021.

As stated above, Bitcoin is an innovative peer-to-peer technology that relies on specific rules, nodes, and miners. Miners are the actual people who process all Bitcoin transactions and ensure transparency and safety. Bitcoin mining is also the process of releasing new coins in circulation. 

Naturally, to keep the system going, miners are rewarded. Note that this reward is halved every four years; the last halving took place in May 2020.

It’s also important to know that unlike fiat currencies, Bitcoin has a limited supply of 21 million coins, which makes Bitcoin a desired investment.

While Bitcoin has grown from a peer-to-peer platform to a global phenomenon and a store of value, the truth is that Bitcoin transactions are slow and mining takes a lot of power. Believe it or not, a Bitcoin transaction can take up to 10 minutes.

Interestingly enough, as a result of slow processing times, Bitcoin Cash was created in an attempt to make transactions faster. Bitcoin Cash is a fork of Bitcoin that has gained the support of many big Bitcoin investors (its ticker symbol is BCH).

That said, you don’t have to be a miner or a crypto king to realise the potential of Bitcoin in the world of finance. Though Bitcoin is an asset that differs from other investment options (for example, stocks), Bitcoin investing is definitely on the rise.

Is It Worth Investing in Bitcoin in 2021?

Bitcoin has changed the world of investing to a point of no return. As we can see, its nature and way of processing transactions are fascinating. No surprise that Bitcoin is the largest crypto by market cap of $254,620,631,806 at the time of writing.

If you are wondering if it’s worth investing in Bitcoin in 2021, let’s dig more into its history. Because of its revolutionary nature, Bitcoin has changed the way we think about investing and money in general. Bitcoin has also led to the creation of many digital alternatives or altcoins, such as Ethereum, Litecoin, and Tether.

Bitcoin is highly liquid and often seen as a safe haven. In fact, some experts believe that Bitcoin may outperform gold. Investing in Bitcoin is worthy because it can help traders diversify their portfolios and hedge against inflation, too. Expert Paul Tudor Jones, for instance, is one of the financial gurus who believe that Bitcoin is a great hedge against inflation, just like gold in the 70s.

From short-term to mid- and long-term investing, Bitcoin is a popular choice among traders and blockchain enthusiasts. Looking back at 2019, for instance, Bitcoin saw a 300% Return on Investment (ROI) in the middle of 2019. Despite its jagged history and price swings, Bitcoin managed to survive the bear market triggered by the ongoing pandemic.

If we focus on Bitcoin sentiment analysis, we’ll see that the sentiment around this crypto is high, especially during the COVID-19 pandemic. 

As reported by Trading Beasts, by October 2021, Bitcoin may reach a maximum of $15,121.582 and a minimum of $10,282.676.

At the same time, investing in Bitcoin in 2021 comes with numerous risks and uncertainties, so it’s only up to you to decide if Bitcoin investing in 2020 is worth it.

How Much Will Bitcoin Be Worth in 5 Years?

If you are wondering whether Bitcoin is a good investment or not in 2021, maybe you also want to know how much Bitcoin will be worth in five years.

As stated above, cryptos are highly volatile and nobody knows how much Bitcoin will be worth in the future. 

Looking back, Bitcoin has had numerous ups and downs. Believe it or not, the first traded Bitcoin was worth $0.003. Now, it is trading at $13,742.24, so those who bought Bitcoin in the early days can enjoy an ROI of over 100,000,000%.

Despite its volatility, many experts believe that Bitcoin has a positive future and claim that its value will increase in the next few years.

For instance, investor Tim Draper believes that by 2023, Bitcoin's value will increase significantly: “$250,000 means that Bitcoin would then have about a 5% market share of the currency world, and I think that maybe understating the power of Bitcoin.” 

Expert Max Keiser, on the other hand, said, “I am officially raising my target for Bitcoin - and I first made this prediction when it was $1, I said this could go to $100,000 - I’m raising my official target for the first time in eight years, I’m raising it to $400,000.” 

Though there are many factors that affect Bitcoin and its price, such as demand and supply, technology, and sentiment, one thing is for sure: Bitcoin is here to stay and change the world of investment far beyond 2021.

Should I Buy Bitcoin?

While Bitcoin is one of the most traded cryptocurrencies that can potentially make you a millionaire, that doesn’t mean you should buy Bitcoin. 

Even if we base our future predictions on past performance and assume that Bitcoin is worth investing in 2021, you should do your own research and clarify your financial goals. Are you interested in crypto day trading or hodling? Do you want to trade CFDs or own Bitcoin? Only after you’ve set clear and realistic goals, then you can get started and invest in Bitcoin.

Whether you decide to invest in Bitcoin or other cryptos and assets, do not forget that investing comes with high risks and unknowns. Without a proper risk management strategy and willingness to embrace losses, traders may experience financial and emotional disaster. 

In fact, according to data, 90% of beginner traders who do not invest in education lose money and quit in their first year of investing. So never underestimate the importance of risk management and trading psychology. Never trade out of greed or revenge and learn how to control your emotions and stress in order to pave your way to crypto investing success.

Who Should Consider Putting Bitcoin in Their Portfolios?

Given the fact that there are more than 54 million digital wallets in existence, there’s no doubt that crypto investing is popular across the globe. Those who are willing to take the risk and invest in Bitcoin in 2021 may potentially make a profit.

Bitcoin is a great investment option for day traders who want to profit from high price swings and multiple trades during a single trading day.

Bitcoin is also a great option for mid- and long-term investors who want to buy and hold cryptos until a good opportunity comes up.

Bitcoin is also good for crypto enthusiasts who believe in the future of decentralised financial systems.

Are you one of them?

Ready to dive into Bitcoin trading?

Final Words

Is It Worth Investing in Bitcoin in 2020?

Although it’s up to you to decide if you should invest in Bitcoin, let’s not forget that Bitcoin - the first digital coin that has inspired thousands of crypto projects - has numerous cons.

The main advantage of Bitcoin over other cryptocurrencies is its liquidity. It’s noteworthy that around 15,174 businesses worldwide accept Bitcoin. Users do not have to rely on that, though; with more than 5,041 bitcoin ATMs in existence across the globe, one can easily transfer Bitcoin to fiat money and vice versa.

Bitcoin’s market capitalisation is over $254,620,631,806, which makes it clear that Bitcoin is the most popular and traded coin.

The bottom line is that you should always do your own research before investing in Bitcoin or other assets. Make sure you carefully consider all the factors that affect the price of Bitcoin before deciding whether or not to invest in Bitcoin (BTC).

Key Points

  • Bitcoin is the first cryptocurrency ever that has inspired the creation of thousands of altcoins and crypto projects.
  • Despite its high volatility, many experts say that investing in Bitcoin in 2021 is worthy and believe in its positive future.
  • Investing in Bitcoin is a not risk free venture, so one has to invest in proper trading education, risk management, and self-control to succeed.

 

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Do you think that investing in Bitcoin in 2021 is worthy? 

We hope this article about What Is Bitcoin And Is It Worth Investing In Bitcoin In 2021? All You Need To Know About Bitcoin Investing In 2021 has been helpful. If you’re considering adding Bitcoin BTC to your portfolio and want to know the answer to the question ‘is Bitcoin a good investment’, there’s no better place to start than by keeping on top of cryptocurrency trends and predictions. 

Read more:

Bitcoin Price Prediction Forecast: How Much Will Bitcoin Be Worth In 2021 And Beyond?

What Top 10 Cryptocurrencies To Invest In 2021?

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15 Reasons to Invest in Cryptocurrencies

Most Popular Cryptocurrencies In The UK

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Most Important Cryptocurrencies Other Than Bitcoin

Most Popular Cryptocurrencies In The USA

FAQs

What Is Bitcoin in Simple Terms?

Bitcoin is a digital platform that allows people to send virtual money across the Internet without relying on banks and financial authorities. Transactions are recorded in a blockchain (or a chain of transactions), so everyone can see them in a transparent and timely manner. The good news is that one can not only send or receive money globally but can also invest in Bitcoin.

Is It Legal to Invest in Bitcoin?

Though cryptocurrency investing is increasing in popularity, the truth is that its status is not very clear and crypto trading regulations across the world are still catching up with blockchain technology. Thus, before you invest in Bitcoin, make sure you’re familiar with the crypto regulations and taxation that apply to the country you are based in. 

How do I start investing in Bitcoin?

It’s easy to start investing in Bitcoin. All you need to do is choose a reliable platform with advanced trading tools, open and fund your account, and start your investment journey. Check out eToro that allows you to buy and sell Bitcoin and trade CFDs of over 90 crypto pairs.

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