Bitcoin. You’re probably sick of hearing it by now. Your work colleagues, friends, and even your grandma just won’t stop talking about the amazing profits they’ve made from Bitcoin (BTC) over the past few years. Yet still, you have not invested. Still, you ask yourself “is bitcoin a good investment?”
Well, the good news is you are not too late. Bitcoin has immense potential and it’s always a good time to enter the market. For those investors or crypto beginners that may feel lost in the world of bitcoin, we are here to say “don’t worry.” We’ll clear up any confusion in this article with five simple reasons why bitcoin is a good investment.
Don’t forget to stay until the end of the article for some bonus content that will help you utilize bitcoin in more creative ways.
Investors from all backgrounds are flocking to bitcoin as the new, digital store of value. This is not a coincidence and is far more complicated than just a shallow investment trend that will fizzle out. Bitcoin has several advantages for investors and of course, some small disadvantages as well.
Let’s get into it.
Volatility: As described earlier up above, bitcoin’s price always moves in waves, sometimes extremely violent ones. For example, if one bought bitcoin in mid-April 2021, they would have bought BTC for around $63,000. If they sold a few weeks later, the price was around $34,000, generating a nearly 50% loss. Bitcoin’s price eventually recovered to $63,000 (and beyond) but these short-term volatile swings are a great example of the damaging risk on the market.
A target for scammers: Wherever there are large amounts, criminals are never far away. Bitcoin is no different. Due to the enormous wealth potential bitcoin provides, many people have come into life-changing profits. However, this also means they are at high-risk for scammers attempting to phish information that may lead to their crypto exchange password, private wallet keys, or more. If you’re investing in bitcoin, don’t tell everyone you know and of course, always quadruple-check any request from anyone asking for your username, password, or any private information. Cryptocurrency can be very safe... if you’re careful. So always stay alert.
Not great for spending: Bitcoin is technically a cryptocurrency but ironically enough, it does not make that good of a currency. Currency should have a stable value. Otherwise, item prices will be in constant fluctuation every hour. There are indeed vendors that accept bitcoin as a payment method but really, it’s not very inefficient. What bitcoin does best acts as a supreme store of value? Park your fiat money into bitcoin and watch it grow over the years to new heights. That’s what it’s for!
Is bitcoin the future of money? It’s certainly trending in the right direction. The world’s top institutions and companies are starting to add bitcoin to their balances sheets and even entire countries like El Salvador are making bitcoin legal tender. Suffice to say, bitcoin has moved well beyond the “fad” part of its evolution. So what’s next?
Bitcoin is far from the top. Its extreme volatility still suggests a maturation process is still in effect. Also, China’s “ban” on bitcoin left many around the world questioning the legitimacy of this technology and worried if other countries would follow. India once banned bitcoin but recently announced plans to reintroduce it through regulation.
The U.S.A. government is also one that’s investigating bitcoin regulation heavily. Head of the Securities and Exchange Commission Chairman Gary Gensler recently admitted that
“currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending.”
Frankly, Gensler is right. While the industry has made tremendous strides to prove its legitimacy, it’s still extremely “free and wild.” While that may be a good thing for many participants, from a government standpoint, it’s understandable to see why they are concerned about letting this new technology expand and run rampant unimpeded.
“Doomsdayers” often say more regulation means the end of cryptocurrency as we know it but that’s simply not true. Instead, more regulation means more opportunities for the world to access financial markets and services. The future of finance looks like this. Two streams of thought: the traditional and the decentralized. Both will work together, running parallel to each other and bringing benefits to both sides. Fiat is not going away. Neither is cryptocurrency. Both will help one another improve to bring increased financial freedom to the world. This is the next industrial revolution. Will you be a part of it or observe from the sidelines?
Hopefully, you learned a thing or two about bitcoin from this article and perhaps even bought some of it yourself. Now that you’re in the new club, why not explore further avenues that can help you grow that portfolio even more? YouHodler has a wide array of innovative features to help you HODL BTC and “stack sats.” For example: