The concept of a cryptocurrency was first introduced in a research paper published in 2008. It talked about Bitcoin, a currency that can be exchanged on peer-to-peer networks. At first, the world seemed hesitant about adopting the currency, and only enthusiasts who understood its underlying potential reaped from its benefits. Here's what Bitcoin has to offer to traders and the reasons that make it advantageous to investors.
The foremost advantage of investing in bitcoin is the security it offers when conducting transactions. All your transactions are stored on its online ledger, the blockchain, since the time it came into being. No one can append these transactions as their security is ensured by the blockchain verifications protocols that employ cryptography. So, no one can counterfeit money, no one can doubles pend, and no one can add false transactions. Hence, the only governing factor is demand and supply.
The case with fiat currency is that every government or regional body, like the European Union, has one for trading. They control the amount of money that comes into circulation and how to take precautionary measures to control its value. Bitcoin’s value is only determined by market trends that influence demand and supply. Hence, you can be sure that no government intervention will derail your investment strategy.
It's Gaining Traction
Bitcoin already made its mark on the world when it reached a record price of around $60,000 earlier this year. Now that institutional investors are also pooling their capital to invest in Bitcoin, we can expect huge flows of money to influence price growth. Plus, Bitcoin ATMs are becoming more and more prevalent across the world, promoting trading in the currency instead of just holding onto it as an investment.
It's Predicted to Reach the $100,000 Mark
As of writing this article, Bitcoin's price stands at around $40,000. However, predictions based on its past performance indicate that it may soon cross the $100,000 mark. The growth in its price trend is primarily attributed to the way it's circulated. There is a finite number of Bitcoins that'll come into circulation; hence the more you gain right now will determine your holding power in the future. Since it is expected to be traded more readily as a global currency, you can expect more people to jump the bandwagon.
It's Becoming Established
People right now are scared of investing in Bitcoin, thinking that excessive government intervention may outlaw it in the future. However, that can't be possible owing to its market capitalization. Currently, it's approaching a trillion dollars, meaning that a significant amount of investor money is already backed in Bitcoin. In order to protect their standing, no government would want to cause a mass economic crash and subsequent rioting.
Investing in any asset is a risky endeavor. What differentiates it from gambling is that you have the choice to make responsible decisions based on your circumstances and income. Never invest based on someone's advice. Instead, research a particular investment option and think about where it's headed. If you want to be extremely thorough, consider learning technical analysis tools that may help you gauge the trajectory of Bitcoin before investing in it.