Why Considering an Investment in Bitcoin Could be Advantageous

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By market cap, Bitcoin is the largest, and in 2024, it is still making the headlines. With gradual gains in 2023, the top cryptocurrency suddenly increased by about 160% year-to-date in December. Recently, Bitcoin has pushed through $60,000 for the first time since November 2021. 

However, deciding if Bitcoin is a good option for your portfolio will require more than just being on the headlines. Bitcoin, like others, is highly volatile, but it comes with advantages. Let’s look at some reasons you should consider adding Bitcoin to your portfolio. 

Why Considering an Investment in Bitcoin Could be Advantageous
Image by Liam Ortiz from Pixabay

Bitcoin is finite

Inflation is one of the issues that traditional currencies face. It increases living costs and is usually due to the central bank’s policies. With inflation and time, traditional money gradually becomes less valuable. However, Bitcoin poses a solution to this. A code determines Bitcoin supply, which central banks and the government cannot control. New Bitcoins are circulated every 10 minutes, and as a result, the supply of Bitcoin (and hyperinflation) is protected.

Showed tremendous growth

Since its launch in 2009, few assets have outperformed the coin. Data from Investing.com shows that Bitcoin was $0.10 in 2010. After three years, the price grew to $250, a whopping 250,000% growth for early investors. Even the stock market can’t replicate these returns. By 2017, Bitcoin traded at $1,000 and hit a high of $20,000 that same year. Since then, Bitcoin has grown to its all-time high of over $68,000. With the recent push above $60,000, this might be a good time to buy Bitcoin.

Bitcoin is decentralized

Decentralization is vital in the Bitcoin ecosystem. This means no organization, entity, or person controls the network. This is in sharp contrast with many financial assets. For instance, the central banks control traditional investments such as the Euro and the US dollar. They determine its economic policy, like supply level and interest rates. 

Financial institutions and banks are also centralized, meaning bankruptcy could lead to the loss of assets. However, Bitcoin isn’t backed by any central bank or government. Every holder of Bitcoin controls their wealth, primarily if it is held in a non-custodial wallet.  You can only access the wallet via a private key or password. Therefore, a third party cannot freeze or seize your Bitcoin. 

Bitcoin is a medium of exchange

Globally, Bitcoin is one of the most common mediums of exchange among individuals, vendors, and entrepreneurs. Unlike fiat currency, Bitcoin’s advantage is that you do not need to go through third parties. With this, people can send and receive Bitcoin across borders without any regulatory barriers.

For instance, a worker working in the US sends money back home to their family. In this case, the worker might be required to use remittance agents such as Western Union or a financial institution. Any option usually attracts slow transaction times, high fees, and countless forms to fill out depending on the amount to be sent (KYC process).

Endnote

Many individuals are still skeptical about digital currencies and cryptocurrencies, but many have moved to this new asset class. The blockchain space is a transformative industry with huge potential, just like the internet did. However, every digital currency supporter must know that though the advantages are numerous, they must understand the risks involved before investing. 

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