There are many reasons to invest in Bitcoin, for some time the digital currency has attracted a lot of attention in the world of alternative asset classes. Many analysts believe it has the ability to surpass the market cap and usage statistics of fiat currencies, owing to its versatile method of payment. It’s growing adoption, limited supply and low cost transactions have made it a lucrative investment opportunity for traders. Even those on Wall Street have taken note.
In 2015, the New York Stock Exchange launched a Bitcoin index, NYXBT. The Winklevoss twins launched Gemini, a fully licensed and regulated Bitcoin exchange. There is also a Bitcoin ETF, which could appeal to institutions, pension plans and 401(k)s that might want exposure to Bitcoin.
Despite all this activity, Bitcoin, still in its nascent stages has some way to go before winning over the skeptics critical about investing in it. In this article we compiled some reasons to invest in Bitcoin as we believe it makes sound financial sense to board the Bitcoin train for the long run.
One factor that makes Bitcoin valuable over the long term is the supply cap in place. Once it reaches the magic figure of 21 million (expected to happen around 2140), the value of Bitcoin will stabilize over higher belts. It would be an extremely profitable investment to hold.
Adoption increases the value:
It has been observed that, as more and more merchants and companies adopt Bitcoin, it is proving out to be a Bitcoin price booster. As the technology evolves, Bitcoin is expected to serve a crucial role in the transactions of the future. This would certainly add credibility and value to Bitcoin over time.
Positive approach from most Governments towards adoption:
The digital currency businesses and consumers are aware about how Bitcoin is defined and regulated at most places. For example, the IRS (Internal Revenue Service) treats Bitcoin as property, while the CFTC (Commodities Futures Trading Commission) treats it as a commodity. With the EU clearing the VAT on Bitcoin trades, and the commencement of an ETF in South Korea, the global scenario looks positive.
While Bitcoin is Digital Gold, it is still undervalued:
The closest analogy to Bitcoin is Gold in all the right measures. It is scarce, has a finite supply, highly divisibility and cannot be counterfeited. However, one aspect where Bitcoin outshines gold is utility. Gold is only good for jewelry and in industrial production processes. Once it becomes costly, it becomes less useful for both. Bitcoin on the other hand, becomes more useful as a currency in both the scenarios.
Heavy players using it as portfolio diversification tool:
There has been a fundamental shift in the types of investors interested in Bitcoin. What started off as a mere speculative investment opportunity, has now transformed into a full scale investment play. This can clearly be seen in terms of volume flowing into Bitcoin during global economic uncertainty (read Bitcoin and Brexit). Major financial institutions being a part of this change is what makes investing in Bitcoin assuring.
Thus, based on these reasons, it is safe to say that Bitcoin is a game changing investment. Its disruptive nature and ability to revolutionize global trade are just a few of the reasons to invest in bitcoin.