Bitcoin price is always increasing. However, some people are still wondering whether they should invest in this cryptocurrency. Well, Bitcoin is an excellent investment for 2021. This article explains why you should consider investing in Bitcoin.
The most incredible year for Bitcoin was 2017. That’s when the Bull Run rewarded investors with a whopping 1,350 percent return. However, this digital currency lost more than 70% of its value. It dropped from $20,000 in 2017 to $14,000 in January 2018 before hitting $4,000 towards the end of the year. This bear market lasted in 2018 and 2019.
But, at the beginning of 2020, Bitcoin prices started going up. COVID-19 affected Bitcoin negatively, just like it did with most economic sectors. However, Bitcoin outperformed most asset classes towards the end of 2020. More platforms like d-addicts.com that help buying, selling, and investing in Bitcoin easier.
However, this landscape can also be confusing or intimidating for a new investor that wants to explore cryptocurrencies. Bitcoin perspectives also vary. If unsure whether you should invest in Bitcoin, here are some of the reasons to convince you.
Accelerating Bitcoin Adoption
Bitcoin adoption is increasing globally. For instance, the total number of Blockchain wallet users rose rapidly in 2020. Data from Blockchain Company shows that wallets went up from 43 million to more than 62 million this year. However, the number of wallets that hold Bitcoin remained low because retail investors left their crypto with custodians like PayPal and Coinbase. Nevertheless, the number of individuals purchasing Bitcoin through Bitcoin trading apps has continued to increase.
Value Proposition for Bitcoin Is Perfect for Macro Climates
Bitcoin emerged as a result of the 2009 Global Financial Crisis. And this was against a backdrop of government bailouts, quantitative easing, and bank failures. Bitcoin came into the wild, and most people, except a small idealist group, ignored it. After a decade, the world is witnessing a financial crisis characterized by more bailouts, higher quantitative easing, and low-interest rates.
And this has raised awareness among companies and individuals about the unique value proposition of this cryptocurrency. More people have realized the position of Bitcoin in this environment. It’s, therefore, not surprising that Bitcoin has indicated a fantastic response after COVID-19.
Scarcity
Bitcoin is a peer-to-peer, open-source software monetary system that can transmit and store value. A singular authority does not control Bitcoin because it is decentralized. The use of blockchain technology ensures encryption. And multiple parties calculate the number of Bitcoins in a network to maintain protocol while verifying transactions.
This protocol limits this cryptocurrency to 21 million coins only, giving Bitcoin its scarcity. As such, this scarcity will likely continue to maintain the value of this cryptocurrency. And, its demand will also continue to increase. Thus, investing in this cryptocurrency now will most likely earn you good returns in the future.
Bitcoin Halving Cycle
From its inception in 2009, miners produced about 50 new coins every ten minutes. And this verified a new transaction block on this network. Nevertheless, the network is programmed to ensure that new coins in every block decrease with time after reaching a specific number.
This process is known as Bitcoin halving. The first halving cycle with 50 bitcoins occurred within 10 minutes, and it took place in November 2012. After that, miners received 25 coins only during the second cycle. The second halving happened around July 2016, while the third cycle, which occurred in May 2020, produced 12.5 new coins in every block. And, this trend will continue with every halving process.
As such, it’s wise to invest in Bitcoin, considering its outstanding performance over the last 18 months. The reduced supply will only increase Bitcoin demand and price.
The Bottom Line
Bitcoin is undoubtedly the currency of the future. And, you have many reasons to invest in this cryptocurrency today. Choose a reputable platform to start investing in Bitcoin now.
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