Many investors are fascinated by Bitcoin’s meteoric rise. Find out why every modern investor should invest in Bitcoin.
Bitcoin is undoubtedly one of the most sought-after assets by institutional investors and novice traders worldwide today. It is the most prominent digital currency by market capitalization, accounting for over 40% of the crypto industry. Analysts predict Bitcoin will increasingly become more valuable in the future due to its declining supply and growing demand.
Others have also predicted increased regulatory pressures that could potentially harm Bitcoin’s growth. So, why should a modern investor care about Bitcoin? The following article discusses the main reasons why every seasoned investor should add Bitcoin to their portfolios.
Bitcoin Has More Real-world Applications
Speculation was the critical factor that determined cryptocurrencies’ prices in the past. Most people had no idea about their actual uses, and investors primarily bought into them because they believed crypto had great potential. However, such perceptions have changed as significant cryptocurrencies such as Bitcoin develop real-world utility.
Bitcoin is increasingly gaining acceptance and recognition as a form of payment and a store of value. Bitcoin made its historic move in 2021 when El-Salvador made it a legal tender, driving its global adoption significantly.
Several institutional investors have already acquired substantial Bitcoin reserves, primarily using it to diversify their portfolios and hedge against inflation. We are also experiencing a surge in businesses and consumers using Bitcoin to pay for goods and services worldwide. Financial advisors are also increasingly embracing Bitcoin, encouraging investors to put money into it.
Bitcoin is a unique asset, with constant price fluctuations that could make investors feel nervous. However, every investment usually bears a certain amount of risk, and Bitcoin is no less. Unlike many other cryptocurrencies, Bitcoin has a limited supply of 21 million tokens only. Miners have already generated about 18 million coins. Bitcoin’s halving process further strains the pool, cutting the miners’ rewards by half every four years.
The fixed supply cap and halving process enables Bitcoin to become scarcer, retaining its purchasing power over time. Meanwhile, its demand grows as it becomes more entrenched into various global economic sectors. Bitcoin’s supply and demand economics allow it to gain more value, attracting international investors.
Industry leaders, financial market experts, and researchers have made different predictions about Bitcoin’s future. However, the majority are positive that Bitcoin will experience increased growth in the future, setting new records like never before. That indicates substantial potential returns for investors who buy and hold Bitcoin. Read more about how to buy and trade Bitcoin through bitcoin buyer
Traditional assets have been the leading investment instruments for decades. However, they remain under the tight grip of government regulators. That means they are subject to political and institutional influences, exposing investors to several risks. Bitcoin offers a decentralized investment avenue, free from government and regulatory manipulations.
Bitcoin is a decentralized asset not bound by any government regulations and laws. Bitcoin transactions occur on a peer-to-peer blockchain network without any third party, giving investors the desired autonomy in managing their wealth. Bitcoin does not limit users’ transaction volumes, allowing investors to move capital and acquire assets worldwide at their convenience.
A Smart Investment
The world is fast-gearing towards a digital economy, and cryptocurrencies are among the key drivers of that revolution. Bitcoin is a virtual asset that enables investors to secure and manage wealth with greater efficiency, security, and privacy. Its blockchain validates all transactions on an irreversible public ledger, accessible to all users. Besides, blockchain integration could also help institutional investors enhance core competencies such as asset management.
Bitcoin offers lucrative prospects for every modern investor. However, it also has some risks, like volatility, that you should understand before investing. Nevertheless, Bitcoin is undoubtedly a worthwhile investment to consider.