The precedent part of our bitcoin guide covered how to store your Bitcoin. This part is focuses on why you should invest your Bitcoin.
Bitcoin is a significant step forward in the future of currency. Peer-to-peer transactions were traditionally characterized by parties exchanging goods, precious material, or fiat currencies. This central bank regulates and controls the currency and can adjust its value according to political and geographic concerns. Bitcoin offers an easy way for parties to transact value around the globe without any regulator interference. Bitcoin appeals not only because it offers a way to pay for goods and services rendered by others, but also because it is an area of intense investor interest.
- 1 11 Reasons to Invest in Bitcoin.
- 1.1 1. Buy Low, Sell High – Profitable from Bear Market Low Prices
- 1.2 2. A growing adoption rate – Only 1% of the world owns Bitcoin
- 1.3 3. Bitcoin Supply is Limited. The Price of Bitcoin can only rise with demand
- 1.4 4. Technology and Young Market – There are many ways to increase demand
- 1.5 5. The launch of a Bitcoin ETF, and institutional investors will drive the price up
- 1.6 6. Metcalfe’s Law and Bitcoin: High Adoption with Push the Price Up Exponentially
- 1.7 7. Decentralization – Own your money
- 1.8 8. Privacy and anonymity
- 1.9 9. It’s easy to send money overseas
- 1.10 10. Flexibility on the Market
- 1.11 11. Regulations are increasing
- 2 Conclusion about investing in bitcoin
11 Reasons to Invest in Bitcoin.
For a variety of reasons, we believe Bitcoin’s value will rise above its current value. The market works in cycles. The hype surrounding 2021 has subsided and the price has corrected accordingly. Once the hype has subsided and the price has stabilized, that is when it is time to begin investing and accumulating. This is not the only reason to invest in Bitcoin. Take a look at the following arguments for investing in cryptocurrency.
1. Buy Low, Sell High – Profitable from Bear Market Low Prices
Bitcoin is the most interesting asset to invest in over the past decades. The lucrative gains that can be made trading Bitcoin have been unmatched. Many people would have bought anything below $10000 if there had been big rises in Bitcoin.
Bitcoin trades at $46000. The price is still low relative to its all time high. It makes sense to accumulate Bitcoin at a low price, and then sell at the highest prices (and beyond). Markets work in cycles. As you can see, we’ve had a healthy correction. The new cycle is about to begin that could ignite another parabolic movement.
2. A growing adoption rate – Only 1% of the world owns Bitcoin
Bitcoin adoption is increasing at an incredible rate. There were 1,789 bitcoin-accepting merchants in 2013. There were 14,346 locations accepting Bitcoin globally in December 2018, which represents a 700% increase. This shows that the adoption rate is steadily increasing and will continue to grow over time.
The bottom line is that more people are looking to use digital currencies for everyday purchases. The infographic above shows that countries with problems such as corruption, difficult monetary policy, and hyperinflation (Venezuela), are adopting Bitcoin at an alarming rate. People are becoming less trustful in their country’s currency and turning to cryptocurrencies. This could have a positive impact on the market because more people are buying Bitcoin and increasing demand will cause a rise in the price.
3. Bitcoin Supply is Limited. The Price of Bitcoin can only rise with demand
It would be impossible for every millionaire to own one Bitcoin. There are 21 million Bitcoins in total and 17.6million of them have been mined. According to new research, there may be as many as 4 million Bitcoins missing. This could further reduce the available supply. Similar to gold, Bitcoin must also be extracted from the ground. Complex algorithms are required for mining Bitcoin. With the value of Bitcoin increasing, demand will rise in the years ahead.
4. Technology and Young Market – There are many ways to increase demand
Bitcoin’s potential large gains aren’t the only reason it is such an exciting asset. Both the market and technology are still young, which means that there is much potential for price growth and improvement. People investing now may still be considered early investors in the scheme of things, especially if Bitcoin reaches $100,000 or higher.
Bitcoin is 13 years old, and there is a lot of work going on with blockchain every year. The code is constantly being updated to improve scalability and privacy, as well as other amazing features. Bitcoin developers are always on the job. Bitcoin’s potential growth is incredible. As more money circulates, the price of Bitcoin will rise as the market cap increases.
5. The launch of a Bitcoin ETF, and institutional investors will drive the price up
It is important to not overlook the potential for publicly traded bitcoin ETFs. An exchange-traded fund, also known as an investment fund, tracks the price of an underlying asset such as gold and can be traded on exchanges. The chances of an approved ETF becoming a reality are increasing, as regulated bitcoin futures contracts have been placed on the CME/CBOE. ETFs would legalize Bitcoin further and attract all types of investors, particularly institutional investors. ETFs would remove all barriers to investing. The ETF market was opened for gold in the 2000s and the price soared for years. Bitcoin could be the same. A huge increase in bitcoin’s value would be possible if an ETF was approved.
6. Metcalfe’s Law and Bitcoin: High Adoption with Push the Price Up Exponentially
Robert Metcalfe invented Metcalfe’s law, which states that the network’s value increases with the square of its size. This law states that the value of a network grows as it becomes larger. For example, 0.7% of the population uses Bitcoin (0.7 2 =0.49). However, if the population uses Bitcoin more frequently, the network’s value will quadruple (2 2 =4). If 4% of the population uses Bitcoin, the network’s value will increase by x16 (4 2 =16), and so forth. The price of Bitcoin could quadruple if the value of the network doubles. There is no limit on how high Bitcoin can go!
7. Decentralization – Own your money
You can now own your money! Bitcoin transactions and coins are decentralized, so you can own them. You can withdraw and deposit money 24 hours a days, 7 days a semaine without the involvement of banks or other third parties. The Greek financial crisis was a great example of how decentralised money could be very effective. Citizens were unable to withdraw their cash due to a lockdown by the government to pay debts. You can withdraw bitcoin whenever you like, regardless of what the government is doing. People are increasingly concerned about their money and decentralised payment options are more attractive, which could drive up the price.
8. Privacy and anonymity
In 2019, anonymity and privacy are becoming more important. Bitcoin works in a different way than your regular banking network. It takes a lot of work, identification, and sometimes money to open a bank account. Bitcoin could be used to protect your funds. A domestic abuse victim could use Bitcoin safely and securely to save money to help him or her build a life for themselves. Due to the rise in hacks, malware, and viruses, privacy and anonymity are becoming more important. Bitcoin is a great option for people who value privacy and anonymity.
9. It’s easy to send money overseas
It is still difficult to send international bank transfers. They take longer than domestic transactions and are more costly. Bitcoin eliminates the need for intermediaries and lets you send money instantly to anyone in the world, with low fees. This allows you to manage your money more privately and with greater freedom. Standard bank accounts are outdated, so it is worth investing in this technology. It removes all barriers and allows people to send money to one another regardless of where they live.
10. Flexibility on the Market
You can trade and invest in Bitcoin at any hour of the day. You have complete flexibility and there are no restrictions on how you can work with your investments. You don’t need to wait for stocks to open in order to trade your investments. Investors and traders have more control over their money. Flexibility is important and traders don’t want to know when they can or can’t trade their capital. This will drive the price up as traders find the flexibility attractive.
11. Regulations are increasing
Although regulation is becoming more stringent in relation to Bitcoin and other cryptocurrencies, this is not necessarily a negative thing. The asset will gain trust, and its adoption will rise. Increased adoption, as mentioned in the previous points is one of many ways Bitcoin’s price can rise quickly. Bitcoin investing will be safer. The asset’s information will also be clearer, which will attract more investors. Bitcoin and other cryptos are being discussed by governments all the time, proving that they are here to stay.
Conclusion about investing in bitcoin
Bitcoin’s price rises have been driven by global interest in the cryptocurrency. Although one’s losses may easily outweigh one’s gains over time, bitcoin investment further offers a promising investment vehicle that allows one to not only contribute to the future of currency but also further increase wealth.
Bitcoin is fundamentally a disruption in an established global paradigm. It has been a catalyst for investors, pundits and others. The future is uncertain due to bubble concerns, new regulations and new laws. However, bitcoin remains an exciting new development that could change the way we see the world.
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