Get the weekly summary of crypto market analysis, news, and forecasts! This Week’s Summary The crypto market ends the week at a total market capitalization of $2,17 trillion. Bitcoin continues to trade at around $62,300. Ethereum experiences no changes and stagnates at around $2,400. XRP is down by 2%, Solana by 1%, and Dogecoin by 3%. Almost all altcoins are trading in the red, with very few exceptions. The DeFi sector decreased the total value of protocols (TVL) to around…
Why is Bitcoin a Perfect Long-term Investment Prospect?
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The criteria for judging a good investment include the risk profile, time frame, and goals. How much of a trade-off are you willing to make for an uncertain outcome? We could define a perfect investment as giving you better returns than anything else. An investment that fits your needs maximizes your odds of getting the best returns. So is Bitcoin that investment for you?
In just over a decade, the crypto world has grown exponentially. Bitcoin is the first crypto released at the top of this multi-billion dollar industry. What has kept Bitcoin at the top of the industry for so long? Does its success so far make it a viable long-term investment asset? This article will examine bitcoin features and how it can become your “perfect” investment.
Bitcoin As a Store Of Value
Many crypto enthusiasts criticize the concept of bitcoin as a store of value. Instead, they use bitcoin’s volatile nature to compare it against other digital assets. However, bitcoin is the way for investors who want to hedge against inflation risks.
Bitcoin has a higher utility than other assets with similar growth, such as gold. In addition, acquiring, storing, and trading with bitcoins is easier than gold. Therefore, it’s only logical to say that bitcoin is a better investment than other competing assets, especially considering the ease of access.
Bitcoin as a Currency
Another thing that can help understand the investment benefit of bitcoin is its currency nature. Can bitcoin be used as a medium of exchange? Well, yes, and its transactions are faster.
Currently, there are more than 1.7 billion unbanked adults globally. This population is mainly what bitcoin targets, bringing the unbanked to the crypto banking systems.
Some crypto critics argue that bitcoin has high transaction fees and long transaction confirmation times. However, bitcoins and crypto have more significant potential and utility as a form of currency than fiat.
Bitcoin is a sound currency for the future. Imagine the advantages that come with the blockchains that hub bitcoin. The bitcoin blockchain will assure users of transparency of transactions, speed, and the permanence of all trades. Bitcoins are also not prone to grafts since the sales are public and permanent.
What Makes Bitcoin a Good Long-term Investment?
Bitcoin is a Deflationary Currency
Traditional currencies, even giant currencies like the US dollar, have seen their fair share of inflation over the years. Inflation is a severe crisis in the fiat world. For example, in 2018, Venezuela hit a percentage of 1.7 million in inflation, thus spiraling into hyperinflation.
The reason for the inflation of any currency is the regulating bodies. For example, the central banks may decide to print more money, thus increasing the amount of cash in circulation.
Bitcoin, on the other hand, is anti-inflation. The maximum number of bitcoins for mining is 21 million. There is no point where more bitcoins are going into the market. No external regulating bodies will pressure for more release of bitcoins. That will make bitcoin keep its value for ages to come.
The crypto world heads into a situation where the value of bitcoin will perpetually increase. The rise is owing to the soaring adoption rate that will enhance demand for the coins.
When the globe reaches the maximum, demand will ultimately surpass the supply of bitcoins, thus creating a higher token valuation.
Bitcoin is Highly Liquid
Liquidity is the ease with an asset being converted to cash. Liquid markets like the forex market are smooth and easy. That means it’s easy for anyone to enter or exit a liquid market, and vice versa illiquidity.
Bitcoin is, incomparably, the most liquid investment asset globally. This liquidity is owing to the upsurge in the number of trading platforms like exchanges and brokers.
Anyone can easily trade bitcoin for cash or other assets, including gold, at low fees. This high liquidity makes bitcoin a good investment both in the short run. Since its demand is perpetually ever-growing, bitcoin is a good investment in the long term.
Bitcoins’ Minimalist Trading
Trading stocks in the exchanges typically comes with several requirements that an individual is supposed to hold. It starts by keeping a stock trading certificate or license, and there must be brokers in each transaction.
The trading of bitcoin is minimalistic. Minimalistic trading means a trader can buy and sell bitcoins using the wallet. The transactions are instantaneous, unlike others in stock trades, which may take weeks to finalize. The fast and straightforward exchanges make bitcoin an excellent long-run investment, especially compared to stock.
Bitcoins’ High Volatility Long-Term Benefit
Bitcoin has high volatility. In December 2017, bitcoins’ value hit a staggering $20,000. However, a year later, the price plummeted to $3500 and closed the year below the value. Many investors lost their faith in the system because of the losses made. However, the bull market returned in 2021, and bitcoin hit yet another all-time high, $69000, in November. Crypto winter started in 2022, and as of 3 Jan 2023, bitcoin sits at $16700.
However, the predicted price surge of bitcoin is somewhat unbelievable yet attainable. An analysis predicts the value of bitcoin in 2025 to be more than $340000. The inflated value means that investors who bought the tokens in November 2021 at $69000 will realize supernormal profits in their long-term investments.
Conclusion
Gold is a valuable long-term asset, but its investment worthiness is still a question due to its limited utility. Bitcoins, however, since their inception, have grown in value and utility. As a result, the globe is heading to a situation where bitcoins value will be worth more than anything.
Btc
Bitcoin
$62.547
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price
0.84959%
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Bitcoin’s medium of exchange characteristic proves that it’s a futuristic currency, and its adoption is inevitable. Moreso, unlike other assets that have prices plummeting, leading to losses, bitcoin’s projected value will earn investors great profits. The volatility, liquidity, and deflationary advantage make bitcoin tower over other assets. Although there are thousands of cryptos today, bitcoin will still stand out as the best investment asset.
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