Investing in Bitcoin has been very lucrative to many early adopters, however, it is not too late to get started right now. Bitcoin is the digital asset that is breaking all records in terms of growth and value. Bitcoin’s Rally Crushed Every Other Currency in 2016 – Interesting to note that Bloomberg have labeled Bitcoin as a “currency” and show that it grew more than 100% during the year. Experts are speculating that the Bitcoin price will double again in 2017.
Looking back to an article by Forbes “Should You Invest In Bitcoin? 10 Arguments In Favor As Of December 2015“. Are these arguments still relevant in 2017?
1. The supply is fixed – there will only ever be 21 million Bitcoins ever created – this is written into the code, a set schedule and cannot be altered. Diminishing supply + Increased demand = Higher prices. Bitcoin is deflationary.
2. Assuming Bitcoin is adopted for number of practical applications, the value will rise significantly – moving money around the world can be costly and time consuming – Using Bitcoin is fast, efficient and cost effective and transactions can be confirmed in a matter of minutes vs up to 7 days for normal FIAT currency transactions plus the cost of transaction. Bitcoin transcends borders.
3. More and more people and businesses seem to be using Bitcoin – spending Bitcoin is simplified with the introduction of Bitcoin debit cards, Bitcoin ATM’s and Merchant solutions rolling out globally either at stores or online shopping. Thousands of Bitcoin wallets are being opened daily at various exchanges.
4. A higher price could increase transaction volume, which would then further boost the price – higher prices attract higher transaction volume supporting the price. Liquidity in the market is increasing.
5. Bitcoin has a first-mover advantage among the other digital currencies – many coins have come and gone, all wanting to be the next “Bitcoin”. Bitcoin has the most developers who have achieved much over the past 8 years. It will take a super coin to unhinge Bitcoin from it’s throne… is this coin coming? Here is an opinion on why altcoins make poor long term investment.
6. So far, the attitude of most government regulation toward digital currencies has been, on the whole, cautiously positive – regulation of digital currency enterprises is on it’s way. Japan, China, Philippines are steaming ahead – Japan in particular is driving adoption with consumers, merchants, implementing regulation and recognizing Bitcoin as a method of payment. In a very positive move, Banking giant Mizuho has invested in Japan’s biggest Bitcoin Exchange.
7. A comparison to gold suggests Bitcoin could be undervalued – the Bitcoin price made gold parity in January 2017 – imagine the excitement level when early adopters of Bitcoin witnessed Dollar parity!
8. Comparing Bitcoin with a technology company also suggests it could someday be quite valuable – even though Bitcoin is not a company owned by an individual or government, if it is compared, the Bitcoin value outstrips the competition. If you had to compare buying and holding on to Bitcoin vs investing technology companies such as Facebook and Google, the returns in Bitcoin’s favour are staggering. “According to figures republished by ARK product lead Chris Burniske, Bitcoin has provided a 212% compound annual return on investment since Facebook’s IPO five years ago. By comparison, Facebook itself has generated just 27.1% returns. Amazon managed 31%, Netflix a more solid 72.7% and Google a lackluster 23%.” Read the full article here
9. On pure trading metrics alone, it looks like a buy – in December 2015, the Bitcoin price was $416, fast forward to February 2017 and the price is $1006 – a 141% increase. Yes, December 2015 was a good time to buy, however, now is also a good time to buy as it is of the opinion of many that the Bitcoin price is still cheap. Dollar-cost averaging (DCA) is an investment technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price – this technique can be applied to Bitcoin too. Progress, adoption and value growth can not be ignored. Watch live prices here
10. More investors are taking it seriously and using it as a portfolio diversifier – traditional investments are not delivering the returns investors are looking for and more investors are swinging towards Bitcoin. There are billions of dollars being invested in Bitcoin and Blockchain enterprises and startups as well as the ever growing FinTech space. Bitcoin Hedge Funds are emerging and investors are also buying up Bitcoin itself to hold offline. Bitcoin Certificates are available to trade on the Swiss Exchange. ETF (Exchange Traded Funds) could become a reality in March 2017 – all eyes on the Winklevoss twins and the SEC. ETF’s are inevitable even if approval is not granted this time.
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