CRYPTO
4 Reasons Why Bitcoin is Worth Investing in?
Bitcoin is one of the best-acting currencies in recent years. It was launched in 2009 and did not get much popularity. Fast forward to today, and Bitcoin is trading at approximately $30,000. CoinMarketCap data shows that Bitcoin is already valued at over $550 billion, and many analysts believe the digital asset has plenty of upside.
Bitcoin is also decentralized. Any single entity does not control it and a central bank or government doesn’t back it. Still not sure if Bitcoin is a suitable investment? How many people even use Bitcoin today? In this article, we discuss 4 reasons why Bitcoin remains one of the hottest asset classes for 2024.
1. Price History — Bitcoin has Gained Remarkable Value
Bitcoin attracts many investors — especially those who are willing to gather new business adventures. The numbers speak for themselves — very few assets have outperformed Bitcoin since it was launched in 2009. Bitcoin has already hit highs of $250 till now and is still achieving heights of fame. This represents growth of over 250,000% for early investors.
2. Bitcoin is a Decentralized Asset
Decentralization is an integral component of the Bitcoin ecosystem. In basic terms, this means that Bitcoin has no single point of failure. No institution or organization has control over the Bitcoin network. This is in contrast to most financial assets. Just as traditional currencies like the US dollar and euro are controlled by central banks. The respective central bank will determine economic policies.
3. Bitcoin Can be Used as a Medium of Exchange
When asking the question — Should I buy Bitcoin? — Investors should also look for its use case as a medium of exchange. Currently, the most used method of exchange globally is fiat money, such as dollars, pounds, or euros. In other words, a medium of exchange enables people to buy and sell products and services and somehow promotes integration. Unlike fiat money, Bitcoin transactions do not go through third parties.
4. Bitcoin can Help Savers Hedge Against Inflation
Bitcoin offers a way to hedge against ever-rising inflation levels. Cryptocurrency adoption rates in inflation-prone countries are increasing day by day. For instance, consider a Turkish investor who has $10,000 worth of lira saved in a bank account. If inflation stands at 50%, their savings are effectively reduced to $5,000 in real terms. Now consider the same investor that buys Bitcoin with their $10,000 savings. If Bitcoin remains stable or increases in value, no effect on the inflation rate occurs.
Wrapping Out the Discussion
Whatever your decision, dollar-cost averaging is a smart strategy for long-term investors; it is important not to become overexposed to Bitcoin. In other words, investors should avoid putting all of their eggs into one basket. There is no one-size-fits-all solution to diversification. It all depends on the investor’s risk appetite and long-term financial goals. Hope this article has cleared some of your confusion and you found it worth reading. Do not forget to share your views about the article in the comments below.
