If you’re thinking about investing in Bitcoin, then this article is for you! We’ll discuss everything from the fundamentals of Bit coin to what it means to support and whether or not it’s a good idea. The question of whether Bit coin is a good investment in 2021 has been debated for years. Some people say it’s an excellent long-term investment; others claim that it’s too volatile to invest in right now.
Is it worth the investment in 2021, with every news station promoting Bit coin and its meteoric rise? Would it be too late to get into the market and make some nice money? Let’s have a look at a few things to think about before deciding whether or not it will invest in Bit coin.
Advantages of Investing in Bitcoin
Bit coin is undeniably among the most liquid capital instruments, thanks to the international growth of trading platforms, exchanges, and online brokerages. You may easily convert Bit coin for fiat currency or valuables like gold at meager prices.
- Digital storage
Due to the decentralized structure of crypto ledgers, crypto currencies such as Bit coin are less susceptible to seizure or localized risks such as fires or hardware breakdowns. Not only is the data stored off-site, but it is also copied among all complete nodes around the world.
- Limited accessibility
Because of its scarcity, many speculators regard Bit coin as “digital gold.” Bit coin’s supply is capped at just below 21 million coins, including 17 million in circulation right now, but central bank-controlled currency can be printed at the whims of politicians or states.
- Minimalistic trading
Stock investing necessitates the possession of a certificate or license. You must also use a broker to buy a share of a company. Bit coin, on the other side, is a straightforward currency.
- New opportunities
Bit coin is still a relatively young currency, and new ones emerge on a routine basis. Such newness comes with a lot of price volatility and instability, which could lead to tremendous profit.
Because of its low correlation to stock market performance, Bit coin can help diversify an investment portfolio. A little investment in Bitcoin might boost returns and uncertainty returns while lowering volatility and max losses in a traditional portfolio.
Risks Associated With Bitcoin
There are some serious risks involved with Bit coin, and it is essential to be aware of them.
- First, as we mentioned previously, there is the risk that your bit coins could lose value rapidly due to changes in demand or by the terrible news about security breaches. If you had invested $100 last year when one bit coin was only worth $0.06, this could now be valued at just over $1000 today (not including transaction fees). However, if you were unlucky enough not to sell, then those same Bit coins would now be less than half their original price which means a massive loss for anyone holding them.
- The second major downside of investing in Bit coin comes from its high levels of volatility – prices can change very quickly, making it hard to predict what will happen over the next few months.
- The absolute risk associated with Bit coins is perhaps one of the most serious related to the ability of governments to interfere in its use.
The Bottom Line
Bit coin continues to be one of the leading crypto currencies in 2021. It was created as an alternative currency and has since gained massive popularity for its decentralized nature, security, and privacy features. The crypto currency market has been on a downward trend over the past year after reaching record highs in December 2019, with Bit coin at $20k per coin; however, it remains well above its value from early 2018.