Bitcoin has transformed from a “scam” in some people’s minds to an “alternative asset” in the past few years. The year 2020 marked the important events of institutional investors embracing Bitcoin, which boosted the price of Bitcoin to over $60K. However, the high price of Bitcoin has scared some people away, while crypto enthusiasts and analysts believe the price of Bitcoin will continue to touch new highs. But is Bitcoin a good investment? This is something that many people wonder. Before answering this question, you need to understand what Bitcoin is.
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What Is Bitcoin?
Bitcoin is the first cryptocurrency created by Satoshi Nakamoto in 2008. The original reference implementation of bitcoin is written in the bitcoin white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System.
Satoshi designed the first blockchain database for bitcoin. The first mined block was the genesis block and embedded in the coinbase of this block was the test “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”.
Its payment system aims to charge lower transaction fees than traditional payment systems and bypass intermediaries, such as a bank, enabling bitcoin to be sent on a peer-to-peer network. One of the most unique features of Bitcoin is its capped supply of 21 million, making it an anti-inflation asset.
Bitcoin Price History
Bitcoin’s price rallies owe much to wider adoption by companies and institutional investors. If bitcoin makes it into the mainstream, it has the potential to change the payment system. Tesla, Paypal, Visa, Time Magazine are some of the big companies that support Bitcoin payment and service.
Bitcoin has proven itself as the best performing digital asset that works as a currency and a store of value. While investing in Bitcoin could generate handsome income, it is worth noting that the digital currency market is highly volatile.
The Potential Of Bitcoin
Cryptocurrency is the hottest topic in the investing world, and Bitcoin no doubt will remain the leading crypto asset in years to come. Although investing in cryptocurrency could be risky, it has a lot of potential to generate high incomes. Ten years ago, Bitcoin was just valued at $1, now one Bitcoin worth over $55,000. The market cap of BTC exceeds $1 trillion, outshining those of Facebook Inc. and Tesla.
The increase in Bitcoin price is mainly driven by the following factors.
One of the things Bitcoin opposers constantly argue is that Bitcoin has limited use cases and thus “valueless”. But Bitcoin is one step closer to becoming mainstream in 2020. Paypal and Visa are two of the first giant payment companies to allow customers to buy and sell Bitcoin. Tesla, a leading electric vehicle company, announced a purchase of $1.5 billion worth of Bitcoin and begins to accept Bitcoin as payment in 2021. Tesla’s decision to accept Bitcoin payment sent the Bitcoin price significantly higher.
More use cases no doubt help to promote Bitcoin’s profile. In 2021, we will not feel surprised to see Bitcoin increasing its profile as more companies provide Bitcoin-based services. Cash App announced that users can send Bitcoin to other cashtags for free via its app.
Easier access means more money inflow from retail investors and big investors. Just a year ago, the ways for investors to get some exposure to Bitcoin were limited: they either buy Bitcoin from exchanges or invest in derivatives such as futures trading or options trading. But now more Wall Street companies are providing pseudo-ETF to investors and investors would invest in companies that have added Bitcoin to their balance sheet. Investors’ choices range from Greyscale’s GBTC, MicroStrategy, or smaller mining companies including Marathon, Riot and Hut 8.
With more and more companies and individuals using Bitcoin, Bitcoin’s demand is expected to continue to go up, and one day digital assets will be accepted into the mainstream.
is Bitcoin a good investment now?
Whenever Bitcoin hit an all-time high, people brought up the pizza story. In 2010, one person named Hanyecz bought two pizzas for 10,000 BTC. If he held onto his BTC, now he would be a millionaire. Of course, holding such a volatile asset for so long is too much to ask, but from this little story, we can have a better understanding of the earning potential of Bitcoin. With blockchain technology becoming more mature and cryptocurrency less “geek”, now would be a good time to look into crypto assets. Even if we miss the chance to buy bitcoin at two-digit, we can still bet on its potential now. Many big-name investors are adding Bitcoin to their portfolios. Governments are reviewing Bitcoin with China calling it an “investment alternative.”
Ways To Invest In Bitcoin
Some people dislike bitcoin’s high level of volatility. However, when used right, volatility could help us earn big money. Futures trading enables you to long and short digital currency, offering opportunities to make profits regardless of the market movements.
Additionally, futures trading allows you to take up leverage, a tool that can increase your exposure and earning potential. Besides, leverage allows you to invest less money in order to make a substantial income.
Bitcoin Wallet To Earn Passive Income
Storing your crypto in an interest-bearing wallet is another effective way to grow your wealth, and bear little risks! Bexplus’ BTC wallet is an offline storage system encrypted with multi-signature technology. You can earn up to 21% annualized interest.
Whether to invest in Bitcoin depends much on a person’s appetite and risk tolerance. Bitcoin still has a long way to go to become a mainstream currency, and things could change very fast in the crypto world. But Bitcoin is one of the most promising assets and offers a lot more than traditional assets. So it is always worth looking into Bitcoin and other cryptocurrencies and begin from small capitals.