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Are you wondering why you should own Bitcoin? If yes, here are the primary reasons to own this digital currency.
Owning Bitcoin or any other high-performing cryptocurrency is not speculative. It’s fiscally responsible. Recently, the mainstream media considered cryptocurrency as a speculative fad. However, this era is long gone. In the 2020s, Bitcoin and other virtual currencies are proving to be a legit asset class. If an investor doesn’t accept this reality and adjust appropriately, they risk missing a lifetime investment. Here’s why you should own Bitcoin even if you’re not a veteran investor.
Mainstream Adoption
To some people, Bitcoin’s mainstream adoption may seem like the weakest point. However, an investor that believes in the long trends’ power should pay keen attention to the current mainstreaming of Bitcoin.
More specifically, innovative and prominent companies are purchasing Bitcoin in bulk via platforms like profit maximizer. Essentially, these firms are using fiat money to buy Bitcoin on such websites. For instance, Tesla, one of the most prominent companies in the U.S, purchased Bitcoin worth $1.5 billion in February 2021. PayPal also announced that it would start accepting Bitcoin. These are only some of the moves hinting at the mainstream adoption of this virtual currency.
Reducing Trust in Institutions and Governments
Corporate support is not the only thing that gives Bitcoin its staying power. From an individual investor’s perspective, Bitcoin can help you hedge a risk. That’s why many investors are adding this virtual currency into their portfolios. Essentially, most investors have a reducing trust in financial institutions and governments.
Investing in Bitcoin is a natural way to reduce the trust layer in institutions and governments that haven’t looked out for ways to protect individuals and the public against the conventional financial systems’ fragility. That’s because Bitcoin doesn’t require a single party to create, administer, or verify it. Instead, this virtual currency relies on a decentralized computing network.
Bitcoin is a Hedge
In the past, some investors considered Bitcoin a speculative extravagancy. Others saw it as a fraud, saying that investors that would purchase it would eventually pay the price for their move. Today, the world is experiencing unprecedented economic activity and inflated prices for stocks. Consequently, Bitcoin’s case in an investor’s portfolio stands for diversification.
Initially, bonds and gold served as haven investments during uncertainties. In 2021, Bitcoin has captured most investors’ attention for performing the same purpose. In addition to its newfound status, Bitcoin counterweights stocks because it helps investors to avoid excessive exposure to the U.S currency for any conservative investor that keeps a significant portion of the portfolio in cash.
Deterministic Asset Class
Bitcoin and other virtual currencies were almost impossible in financial history. Gold was arguably the closest class for Bitcoin. That’s because humanity has widely coveted Bitcoin the world over and considered it as value storage. What’s more, gold is a scarce asset.
Today, the unprecedented increase in traditional currency supply and growing corporate interest in this cryptocurrency make Bitcoin more compelling now than ever. This combination has led to a strong use-case for Bitcoin, specifically around its deflationary aspect because the world will have 21 million tokens only. Currently, the world has over 18 million Bitcoins already.
Natural commodities like copper, silver, palladium, and silver have a limited quantity. However, their total amount on earth’s reserve can change. Also, humans are discovering new minerals. On the other hand, Bitcoin has a hard cap, and its network cuts its new tokens’ generation by half every four years.
The world has never had such a digital asset. What’s more, Bitcoin is unique if viewed from the past and different going forward. And because blockchain is yet to fail, both the cryptocurrency and technology behind it will co-exist, provided people maintain consensus and keep a record. But because life doesn’t offer many certain things, it’s hard to tell what the future holds for Bitcoin and other virtual currencies. Nevertheless, these reasons should convince everyone to own Bitcoin.
