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3 Reasons to Buy Bitcoin Like There’s No Tomorrow

It’s easy to be optimistic about the world’s most valuable cryptocurrency.

Very few assets, if any, have outperformed Bitcoin (BTC 0.15%) over the past decade. Now that this top cryptocurrency has a market cap of $1.3 trillion and is constantly appearing in major financial news, investors have no choice but to pay attention.

But you may be wondering if it’s still worth buying Bitcoin even though its price is near its all-time high. Here are three reasons why I still believe adding this digital asset to your portfolio is a smart decision.

Fixed supply

Perhaps the most attractive feature of Bitcoin is its fixed supply cap. There will only ever be 21 million coins in circulation, a limit that is written into the software code. And with ongoing halvingsThe inflation rate continues to fall.

This fixed supply is in stark contrast to many other asset classes, whose supply can increase. Companies can raise more equity and issue more bonds. Gold miners can invest aggressively in developing previously uneconomic areas if the price of the metal rises sufficiently. In other words, supply can change to meet demand.

This is not the case with Bitcoin. Unless more than half of the blockchain nodes vote to change the supply cap – which is unlikely, as this would essentially erode the value of the entire network – the situation will remain unchanged.

Bitcoin’s strongest supporters see it as a direct competitor to the current monetary system. Central banks have historically increased the supply of fiat currencies while simultaneously reducing purchasing power. Bitcoin is a solution to this problem.

Approval stamp

Another reason to buy Bitcoin is related to a development that has taken place this year. I am talking about the long-awaited approval of Spot ETF products. These investment instruments now on the market allow investors to participate in Bitcoin price prospects in a convenient way. There is no need to open a crypto wallet or manage custody. Purchases can be made directly through major brokerage companies.

This is particularly useful for institutions that want to gain access to Bitcoin in a secure manner. The approval of these ETFs can serve as a regulatory seal of approval from the Securities and Exchange CommissionThe hope is that more capital will flow into the asset.

So far, the ETFs have raised $12.1 billion. And since the approval date on January 11, the price of Bitcoin has risen by 43 percent, a positive sign of increased demand.

extension of infrastructure

Bitcoin is about 15 years old. That’s little in the grand scheme of things, given that there are companies that have been around for a century or more. So most people probably view the digital asset as a very novel and risky asset that will eventually die out, and label it a Ponzi scheme or fake internet money.

However, we cannot ignore the growing list of financial products and services involved in the Bitcoin ecosystem. The previously mentioned Bitcoin ETFs fall into this category. Numerous startups are working to increase Bitcoin adoption in the long term by focusing on energy, gaming, and artificial intelligence.

There is also a well-known company, Fintech companies blockthat is working to increase the utility of Bitcoin. Whether that means simplifying payment mechanisms or simply allowing people to buy, hold or sell Bitcoins, the cryptocurrency is slowly becoming more integrated into the current financial system.

Bitcoin can be compared to the early days of the Internet. Nobody knew what impact it would have over time, but with the help of various platforms and applications based on them, its use increased massively. Today, it is hard to imagine modern life without it. And Bitcoin could be the next big game changer.

Investors looking to buy Bitcoins should consider the fixed supply, regulatory approval, and growing infrastructure.

Neil Patel and his clients do not own any stocks mentioned. The Motley Fool owns a position in and recommends Bitcoin and Block. The Motley Fool has a disclosure policy.

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