There’s a lot of buzz going on with the Bitcoin era. The response has been nothing but phenomenal looking at the upward movement of its market value. However, there are people who are having second thoughts on whether this ethereal currency is a good investment.
The key is not to get lost on this economic bubble. You should never invest in something that you don’t understand. So, rule of the game is to always do your research before investing in Bitcoin. You should also have an entry and exit strategy for any type of investment whether it’s stocks, bonds, or cryptocurrencies. If you still can’t make a decision, then read on.
Top Reasons Why Bitcoin is a Good Investment
Traditional currencies would usually lose its value or lose out to inflation because the central banks can print more fiat money over time. It devalues over time. On the other hand, Bitcoin is designed with limited resources to be able to hold its value for a long period of time.
The debate on Bitcoin being a good investment or not has been going on ever since this cryptocurrecny was introduced in 2009. Skeptics are quite normal especially when talking about investments or cryptocurrencies.
Should you dive into the Bitcoin craze or wait it out? In order to make a well-informed decision, you would need to know the reasons why Bitcoin is considered a worthy investment.
Bitcoin is Limited
The law of scarcity applies with Bitcoin. There will only be 21 million Bitcoins in circulation – no more and no less. It’s a public rule and absolutely noone can produce more than that number. There is very limited amount of it or approximately just 0.0023 BTC allocated for each person. So the law of demand and supply is prominent. The lesser the supply, the higher demand would be. It is basically the main reason why Bitcoin is rising in value over the years.
Alternative to Gold
In a digital universe, cryptocurrencies like Bitcoin lead the marketplace. E-commerce today thrives in Bitcoin and other digital forms of cash. Bitcoin is now coined to be the digital gold as it is easily accessible and transferable.
Bitcoin is Decentralized and Transparent
Bitcoin is more transparent as compared to the Federal Reserve or central banks. People aren’t aware just how much money is printed on for what specific purpose these are intended for. With Bitcoins, you are completely in control and all transactions are verifiable.
Bitcoin Increases in Value over Time
Even though there were low points and peaks experienced with Bitcoin market prices, the trend has always been upward since it was created in 2009. Even though some analysts refer to Bitcoin and other cryptocurrencies as speculation and not an investment, it is a fact that people who has held on to their Bitcoins since 2009 already have thousands to millions worth of profit at hand.
Trading with Bitcoin is open for 24/7 online. You can monitor your investments in real-time. This is precisely the reason why it’s a good vehicle for both speculation and investment. The best time to buy Bitcoin is when the prices have dropped and there’s a potential for increase. People who would sell their Bitcoins in a panicky state in dips would often regret it when the prices peak in the next days or weeks. Bitcoin investment is risky just like any other investments. It is always recommend spreading your risks and not putting all your eggs in one basket.