Benefits of Investing in Bitcoins
We have talked a lot about Bitcoins in our previous articles, so if you have been following us you must know by now what bitcoin is and how it works. If not, read about Bitcoins here.
Now, moving on with the idea behind this article, the value of Bitcoin has skyrocketed in the past few months and is now standing at $58,212 (as of May 10th).
Who would have thought that a digital coin with no physical existence and is completely decentralized can revolutionize the traditional financial system?
Bitcoin is not just a digital currency that we can use to buy goods or services, it is more than that. Let us explore the benefits of investing in Bitcoins:
No-Risk of Inflation
Fiat currencies are regulated by governments, but Bitcoins are not. Inflation occurs when the government starts printing more money that reduces the purchasing power of the people.
Unlike fiat, Bitcoin is a deflationary currency. The total supply of the coin is restricted to 21 million coins. The more people buy Bitcoin, the higher the price will be to match the demand.
Additionally, the rewards for Bitcoin miners are halved every four years. This further adds to the scarcity that may positively impact Bitcoin’s value in the future.
Eliminates the Risk of Fraud
Bitcoin owners have the sole responsibility for their coins as no third party is involved. Each transaction is stored and verified, so there is no chance to fabricate or reverse a transaction after a purchase has been done.
There is a risk of credit card chargeback and PayPal refund fraud with fiat and other financial institutions.
When it comes to a merchant’s protection, this is one of the key advantages of Bitcoin.
The only possibility of becoming a victim of fraud is when you lose your Bitcoin private key by consciously handing it over to someone or sending coins to another wallet.
It is your responsibility to keep your Bitcoins safe, and because it is decentralized no one can take or freeze your wallet.
Many investors believe Bitcoin is a risky and inappropriate investment option.
However, the value of Bitcoin has increased surprisingly and is standing strong at $58,212 (as of May 10th).
Compared to the stock market and other financial assets, Bitcoin has recorded the best annual returns so far.
Investors also believe that the price of Bitcoin will increase further as soon as the chart patterns indicate the dominance of the bull market.
If we consider historical patterns, big returns for investors are in proximity.
There are approximately 4.66 billion individuals in the world who have access to the internet, but not everyone has access to the traditional investment markets.
Bitcoin is an asset class that anyone can obtain if the exchange is supported by the country they live in.
Furthermore, for Bitcoin investors, the barrier of entry is low, which means they can invest big or small amounts as per their affordability.
Bitcoin is highly liquid because there are well-established trading platforms, exchanges, and online brokerages around the world. It can easily be traded for cash or other assets (like gold) with minimal fees. Bitcoin is a great investment vessel if you are looking for short-term gains due to liquidity. Also, due to the high market demand, cryptocurrencies can be good for long-term investment as well.
Stock trading requires a certificate or license, and one must go through a broker to trade a company’s shares. But you can buy or sell bitcoin from exchanges and store them in your digital wallet. Also, Bitcoin transactions are instant, unlike stocks that take days or weeks to settle.
How to Invest in Bitcoin?
Bitcoin has emerged as one of the fastest-growing cryptocurrencies, and more people are investing in it. New investors who are willing to invest in Bitcoin must get a Bitcoin wallet to store their BTC coins. You can buy Bitcoins by opening an account with a crypto exchange. After completing the user verification process, add your bank account details for deposits and withdrawals. Also, you do not need to buy Bitcoin as a whole, in fact, you can buy a fraction of a Bitcoin.
In today’s time, Bitcoin is the best investment option as compared to gold and stocks. The returns are higher, and with proper know-how of the market, you can earn significant profits by investing in Bitcoin. However, the market is volatile, so it is better to invest as much as you can afford to lose.