Bitcoin was one of the first cryptocurrencies in the market and has stayed on top ever since. Its influence is steadily growing shi Nakamoto, bitcoin’s founder insists that “If Bitcoin remains a small niche, it’ll be worth less per unit than existing currencies. If you imagine it being used for some fraction of world commerce, then there’s only going to be 21 million coins for the whole world, so it woulwith statistics showing that there are over 5 million users on the Bitcoin network, with many joining with each passing day.
From February 2021, Bitcoin mostly maintained a value of above $50,000 per coin. It only dropped below $50,000 mark on 23rd April.
Prominent brands including Tesla have associated themselves with the cryptocurrency, disclosing that it had purchased $1.5 billion in Bitcoin as part of its cash holdings. The company also accepts bitcoin as payment.
Tesla’s investment and the high cost of the coins are factors appealing and influencing a lot of people to invest in this cryptocurrency, as they are convinced that it is a smart investment.
On the other hand, there is a lot of skepticism surrounding Bitcoin and cryptocurrency as a whole. As US Treasury Secretary, Janet Yellen alluded to in February, “Bitcoin is an extremely inefficient way of conducting transactions. It is a highly speculative asset, and I think people should beware. It can be extremely volatile, and I do worry about potential losses that investors in it could suffer."
In an interview that same month, Bill Gates added to the skepticism by noting that, it was one thing for Musk and Tesla to invest in bitcoin, but that doesn't mean average investors should follow that lead.
"I do think people get bought into these manias, who may not have as much money to spare, so I'm not bullish on bitcoin. My general thought would be that, if you have less money than Elon, you should probably watch out."
It’s worth pointing out that according to Forbes, apart from Amazon CEO, Jeff Bezos, no one has more money than Elon Musk. Thus, only Jeff Bezos can invest in Bitcoin according to Bill Gates
Meanwhile, Bitcoin is a cryptocurrency created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are anonymous and are made with no brokers or intermediaries.
It was developed as a decentralized, digital currency free from governmental oversight. The cryptocurrency is stored on a computer and sent between users across a network without the need for an institution or government intermediary.
During its first year, miners or computers involved in cryptocurrency creation traded bitcoins for fun. The first bitcoin payment occurred in Florida on May 22, 2010, when a man bought two Papa John's pizzas worth $25 for 10,000 bitcoins. At that point, four bitcoins equaled one penny.
As of April 24, 2021, one bitcoin is worth around $ 49,590– which means the bitcoins used to buy tAs As pointed out above, cryptocurrency is comp.
One of the main reasons people are speculative of investment in Bitcoin is the fact that the number of bitcoins will be limited to 21 million.
Satoshi Nakamoto, bitcoin’s founder insists that “If Bitcoin remains a small niche, it’ll be worth less per unit than existing currencies. If you imagine it being used for some fraction of world commerce, then there’s only going to be 21 million coins for the whole world, so it would be worth much more per unit.”
However, despite the fact finite supply of bitcoins and cryptos is a benefit and protects value, statistics indicate that there are already over 18.6 million bitcoins in circulation. As a result, experts estimate that the last bitcoin would be mined in 2040.
These supply limitations make cryptocurrencies unsuitable as legal tender because the static 'money supply' would deprive central banks of the ability to conduct countercyclical policy.
As pointed out above, cryptocurrency is completely unregulated and decentralized. Skeptics therefore question how you can trust something that has no rules.
If you are frauded while transacting with Bitcoin, there is no means to recover your funds. Also, if a hacker hacks into your wallet or you lose your password, it could mean the funds are lost forever.
If a hard drive crashes, or a virus corrupts data, and the wallet file is corrupted, Bitcoins have essentially been “lost”. There is nothing that can done to recover it. These coins will be forever inaccessible in the system. This can bankrupt a wealthy Bitcoin investor within seconds with no way or form of recovery.
BUILT IN DEFLATION
Since the total number of bitcoins is capped at 21 million, it will cause deflation. Each bitcoin will be worth more and more as the limit of Bitcoins maxes out. This system is designed to reward early adopters.
Experts say since each bitcoin will be valued higher with each passing day, the question of when to spend becomes important. This might cause spending surges which will cause the Bitcoin economy to fluctuate very rapidly, and unpredictably.
MASSIVE FUTURE POTENTIAL
Bitcoin has over 5 million users. Due to the fact that it is very well-accepted among the people, many experts believe that Bitcoin will continue to rise as time goes on.
It is even believed that there will be a time where majority of the world’s population will be using Bitcoin. During these times, governments will have a lot of pressure from the public and they will have no choice left but to make it an official payment method.
Therefore, early investors will be able to profit the most from these events.
Experts argue that Bitcoin is a hedge against inflation and the U.S. dollar, and that it will survive any economic or infrastructure collapse, comparing it to gold.
Anthony Pompliano, the Founder and Partner at Morgan Creek Capital Management notes that “If you think of the structure of every single currency in the world, they’re inflationary and they are controlled by governments. And those governments have very small groups of people who make the decisions as to what happens to that currency.”
He argues that because the supply of bitcoin is limited and is controlled by computer code, it is “the greatest protector of purchasing power.”
A GREAT TOOL FOR DIVERSIFICATION
Investing in digital currencies, like bitcoin, may help investors build even more diversified portfolios with higher returns. Investors have pointed out that Bitcoin has historically performed as an uncorrelated asset, meaning it does not necessarily move with the traditional stock or bond markets. As a result, it may provide benefits to an investment portfolio that “previous generations of investors could only have dreamed of.”
From the arguments made for and against investing in Bitcoin, it is obvious that one shouldn’t rush to invest without understanding how it works. Like the other investments, investing in this cryptocurrency comes with some risks.
Therefore, don't make your decision based only on success stories you hear. Take your time to research the market before you start investing in this cryptocurrency.