Investing in Bitcoin does come with some risks, just as any investment opportunity. You might feel that because crypto is considered a volatile currency, it’s more likely that you’ll experience a loss rather than a reward. But this isn’t necessarily the case.
Here are the five most compelling reasons to think about investing in crypto this year.
Potentially Lucrative Long-Term Profit
Bitcoin did experience a significant low back in 2015, when the price plummeted to around $180 per coin, with the previous value standing at over $1000 just two years prior. Even so, the price of Bitcoin has massively increased over the past ten years, indicating that this digital currency is a worthwhile long-term investment opportunity.
At the end of 2019, the price of Bitcoin climbed to over $68,000. So, if you are searching for a long-term investment strategy with potentially high returns, Bitcoin is a worthwhile choice.
With this, this particular digital currency is slightly less risky as a long-term investment. More often than not, cashing in on coins too soon is the most common reason beginner investors sometimes run at a loss.
Diversify Your Investment Portfolio
As an investor, it’s pretty important to build a diverse portfolio because diversification reduces overall risk. Because Bitcoin is a different asset, it doesn’t follow the regular financial markets.
Bitcoin is also protected from inflation as a majority of investors consider its value similar to that of gold, marking it as a safe-haven investment during times of economic uncertainty. As a result, if you are already an investor, buying these digital coins is a great way to diversify your portfolio.
Tech Advancements
Blockchain and other tech advancements like The Lightning Network are designed to improve transaction times and fees; these transactions are faster and far more affordable than transacting with traditional currencies. As a result, Bitcoin can become a more practical currency to use on a daily basis. Buying and sending Bitcoin with Noones and other Bitcoin apps is increasingly convenient.
Limited Supply
Unlike traditional currencies that can be printed in capless quantities through banks, there are only so many Bitcoins out there, and its scarcity is built into its code. With this, the growing demand for coins over time will drive Bitcoin value and potentially overthrow the increasingly damaging effects of inflation. Just as with gold, the scarcity factor ensures long-term value.
Accessibility
Bitcoin is considered a censorship-resistant asset that’s also borderless. Coins are available to anyone around the world who has access to an internet connection, making it one of the most accessible investment opportunities around.
Due to global accessibility and the coin’s ability to hedge against inflation, investors in countries facing periods of economic uncertainty can safely preserve their wealth. Therefore, the global accessibility factor also makes Bitcoin a great investment opportunity.
As Bitcoin becomes more widely accepted, the demand for coins increases. As the demand grows, so does the value. Even though digital currencies remain a speculative investment, price indicators over the past ten years suggest that Bitcoin is a worthwhile long-term investment, even for beginners.
