If you are faced with a choice of which asset to invest your savings in and you have not yet decided, then you should read this article to make the right decision.
A crypto asset that will protect your savings
Bitcoin has been around for almost 12 years (its “birthday” is January 3, 2009, the date the Genesis block was created). It didn’t die in early 2014, when the exchange that serves 80% of Bitcoin trading, Mt. Gox, collapsed. It survived hackers who stole large amounts of PTS from exchanges. It suffered an 83% collapse in 2017 from $ 20,000, to almost $ 3,000, as the media called it a bubble that burst and left it for dead. And it didn’t just go away for him. It has become more resilient and reliable.
For example, this year Bitcoin is the most efficient asset class, which has increased by 66% since the beginning of the year.
However, if you are still in doubt, here are 23 reasons why you should buy more bitcoins.
Demand for bitcoin is growing
The number of people investing in this coin is growing every day. Open interest in Chicago Mercantile exchange (CME) Bitcoin futures reached a new all-time high of $ 841 million in August. The options market also signals growth. All major bitcoin options exchanges, such as Deribit, CME, or Bakkt, tend to grow gradually and consistently. Similarly, the total number of operating bitcoin ATMs is increasing to 8,000, which is more than 90% more than in 2019.
Preserving the value
More dollars have been printed in recent months than in the previous two centuries combined. It seems obvious that people are starting to look for insurance against inflation. Prominent American economist Peter Schiff recently warned that these excessive amounts could lead the US to a state of hyperinflation.
As hyperinflation and negative interest rates become a reality, Bitcoin is a simple and straightforward solution for saving your capital. It proves again and again that it is a means of saving.
The total number is limited to 21 million
Unlike traditional Fiat currencies, PTS cannot be printed by the government. A limited number of coins are available, because the total number is 21 million units. Currently, about 18.5 million bitcoins have been Mined. There are less than 3 million copies that have not yet been put into circulation. In addition, more than 30% was lost. The more people do this, the higher the price increase will be. So, the deficit is one of the factors that shows that it is not too late to invest in it.
More and more legend investors trust Bitcoin
One of the most notable converts is billionaire hedge Fund Manager Paul Tudor Jones. His BVI Fund invested between 1 and 2 percent of its assets in Bitcoin futures contracts.
Social Capital founder Chamat Palihapitiya spoke out against the rather negative perception of the Cue ball by Warren Buffett, and urged people to invest at least 1% in the asset.
Katie wood and her ARK are the most successful investor in the last five years. It recommends the use of BTC in the portfolio ranging from 2.55% to 6.55%.
CBDC will raise the price of Bitcoin
The Central Bank’s digital currency, abbreviated CBDC, is no longer a dystopian future. It`s already here.
The fed recently announced a partnership with MIT to create its digital dollar. The European Central Bank launches proposals for a digital Euro. And China’s Central Bank has already issued a digital currency worth 10 million yuan to 50,000 people as a test. According to a BIS report published in March, at least 17 governments are considering or testing some form of digital currency.
So, what exactly does this mean for the crypto king? Introducing a digital dollar, Euro, or yuan would be extremely profitable. People will realize that with Bitcoin, they will still be able to receive, transfer, and store money without any obstacles to them.
Compared to CBDC, BTC will be an easy choice.
The Lindy Effect
Bitcoin has been around for almost 12 years. According to the so-called “Lindy effect”, its survival assumes that it will last at least as long.
The Lindy effect essentially States that the life expectancy of non-perishable things, such as technology, in the future is proportional to their current age.
If the Lindy effect persists, Bitcoin will be able to achieve the trust and usage needed to bring prices closer to $ 1 million. However, investors need to be patient.
Bitcoin holds above 200-week moving average
The price of Bitcoin has never fallen below the 200-week moving average. It is significantly higher than the average in bull markets, and bounces off the 200-week moving average in bear markets.
In addition, according to Bitcoin’s 200-week moving average, the asset is currently at an all-time high in price.
Record number of consecutive days over 10 thousand dollars
In 2017, it exceeded $ 10,000 and remained at this level for 62 consecutive days. However, this was not sustainable. This was a classic broken top in a market that reached overbought levels.
This time it’s different.
As of last night, Bitcoin had set a new all-time high of 88 days. And this is a huge step for Bitcoin.
Bitcoin and cryptocurrency in General are becoming more popular. During the current global economic crisis, the mainstream media often emphasized that the Bitcoin asset is a potential safe haven.
Crypto companies have integrated with some of the largest companies on the planet, such as Microsoft, Google, and NASA. The recent cryptocurrency partnership with Visa, Mastercard, and PayPal means that it is now easier and more accessible than ever to participate in and integrate cryptocurrency into everyday use cases. This common understanding has been further strengthened by Facebook and attempts to launch its own Libra cryptocurrency.
As more people hear and learn about Bitcoin, it is more likely that some of these people will eventually decide to dip into it and buy a small amount.
Popularity among sellers
Hundreds of merchants are starting to accept Bitcoins for purchases. Large companies like WholeFoods, AT&T and Overstock already accept it as payment. In addition, progress in scaling solutions such as the Lightning Network continues to speed up and reduce the cost of its transactions to increase the viability of the currency for small payments.
The inventory – to-flow model assumes a price of $288,000
The Inventory-to-flow (S2F) investment model allows you to quantify the shortage of a product. The stock represents the total supply in circulation, and the flow represents the amount of new supply per year.
Just look at what the report of the American investment house Fidelity for July 2020 says: “Products with high S2F have historically served AS an excellent means of saving money.
Given the possibility of such high returns, it might be prudent to have a small amount of such a crypto asset just in case.”
The adoption by Wall Street
Multibillion-dollar organizations now allocate 9-digit amounts to Bitcoin.
Stone Ridge, a $ 10 billion asset Manager, now owns $ 115 million in BTC. Paul Tudor Jones has publicly announced that he has invested 2% of his assets in bitcoin. Public company Microstrategy Inc. with billions of dollars in revenue, increased Bitcoin reserves to $ 425 million after the second purchase. The largest digital asset investment Manager, Grayscale, saw record inflows of $ 1 billion in the third quarter, and currently has almost $ 6 billion in total assets.
Fidelity and the Intercontinental exchange (ICE) said : “Bitcoin is a unique investment asset that can be a profitable addition to the portfolio.” Fidelity offers people to increase their number to 5% or more.
In may, America’s largest retail Bank, JPMorgan, announced the start of processing bitcoin transactions.
Possible approval of ETF
Yes, wall street is gaining momentum, but large investors have only limited opportunities to purchase significant amounts of BTC. Without exchange-traded funds (ETFs), many large funds cannot access it.
One of the most striking examples of the impact that an ETF can have is gold. The first gold ETF was approved in 2001, and marked the beginning of a six-year bull run that led to a 700% +price increase.
It is possible that regulators will soon approve Bitcoin ETFs. And if they do, it will be an effective means for funds and large investors to access the asset.
Not subject to confiscation
The 2008 financial crisis taught us that financial institutions are not immune to failure. A Bank can freeze your Fiat currency, or the government can seize your assets almost without warning. Bitcoin is different.
Storing part of your savings in Bitcoins allows you to store your own funds, and makes it easier to travel with them across borders.
With it, you can be your own Bank. As long as you don’t give your private keys to other people, including the police and government agencies, no one can confiscate them.
Still the largest cryptocurrency
Compared to the rest of the crypto market, Bitcoin is an old-timer and has the most reliable network. In addition, it continues to lead in market capitalization and transaction volume with a daily transaction volume of more than $ 10 billion. This figure dwarfs Ether (ETH) and Litecoin (LTC), which have daily transaction volumes below $ 500 million.
Infrastructure continues to develop
Wallet numbers are only part of the story. The number of people who keep the Cue ball in their wallets is negligible compared to retail investors who leave their PTS with a custodian such as Coinbase or Square’s Cash App.
Thanks to the technological development of blockchain, the technology behind Bitcoin, entire sectors of the economy, from banking and energy to transportation, are undergoing a revolution.
Crypto regulation is evolving
Back in 2010, there was no regulation of crypto. Then there were countries that ban cryptocurrencies. These days, only a few countries completely ban Bitcoin. We still don’t have certainty, but we can see that happening soon with global regulation.
The EU intends to develop its framework in four years. Such improvements help to legally define a crypto asset, which in turn contributes to mass adoption.
A great alternative to gold
Many people view a Bitcoin asset as digital gold. But it’s even better.
It’s easy to carry, it is more acceptable in restaurants, hotels, etc., than a gold brick, and allow the international transfer. It can also be used as a universal store of value, accessible anywhere with a phone and Wi-Fi connection.
A consistent increase in prices
While Bitcoin may be unstable, it has outperformed many traditional assets in the long run. For example, if you held it for the past nine years, it brought in an impressive 90% annual return.
It is easier to use
Do you have a family abroad? Bitcoin is also easy to send to others. Companies such as Western Union can accept 5-10% of international transfers, while the recipient may still have to travel to a certain location to receive funds. Bitcoin allows you to easily and quickly send funds from your phone to the recipient’s smartphone. This is the money of the next generation and the basis of our economy of the future.
Diversification through a new asset class
Trade wars, money printing, zero interest rates, Bank fraud – this is the new normal. The global financial system is on the verge of collapse, and confidence in it is falling. Stocks, real estate, gold and bonds usually move in the same direction during periods of ups and downs. Bitcoin has become a lifeline because it is uncorrelated and free of politicians and Central banks.
Most of us will agree that it is a very different asset class. This is not just a viable alternative investment class. Given that cryptocurrency adoption is doubling by about 100% a year, the Cue ball certainly has huge potential for the next ten years.
Bitcoin has historically performed exceptionally well 12-18 months after the first two halvings. Reducing the new supply or flow of coins in the face of increasing demand has historically driven up the price. This is the beginning of four Bitcoin market cycles.
However, bitcoiners need to be patient. It will take time for bitcoin to gain the trust and use needed to push prices up to about $ 1 million.
The first followers of Bitcoin were enthusiasts and philosophers. They wanted financial freedom. They saw that big banks playing fast and loose with human money triggered the 2008 financial crisis. They saw that governments around the world are bailing out banks using your money.
Therefore, some people have a question: “is it worth buying Bitcoin?” not so much about the price, but about its philosophy. Bitcoin is a movement. Its basics mean that “big brother” can’t control, censor, or confiscate your money.
So what is Bitcoin if not a great philosophical belief? Faith in financial freedom, openness and transparency.
All these reasons show that it is not too late to invest in BTC. Turning 1-5% of your fortune into BTC is a good idea. You will protect and save your savings and control your own money.