What makes BTC such a good long-term investment? There are a few key factors
Here’s why Bitcoin is a good long-term investment. Source: pexels.com
Bitcoin is notorious for its wild price swings. However, there are numerous Hodlers who have preserved their crypto assets for years and will do so for years to come. They don’t follow the market’s ups and downs, believing the asset will keep its value.
Cryptocurrencies are the future and Bitcoin is the flagship one
It’s only a matter of time for crypto and DeFi to find their place in global economies. Community-driven assets and technologies are risky, yet desirable. People all over the world welcome this innovation and governments are starting to consider the benefits of these technologies. It took Bitcoin quite a while to rise from the ephemeral asset nobody would accept for a slice of pizza, to one of the most expensive crypto tokens in the world. However, the crypto pioneer is here to stay. It may look like a dinosaur next to the new trendy meme tokens, but it’s trusted more than any other virtual coins. It’s still early days for Bitcoin and other cryptocurrencies. Their full potential is yet to be discovered. Hence, we can only imagine its new all-time highs and gains the holders can get.
It’s digital gold
Everyone must have heard the comparison of BTC with gold. In unstable times, both Bitcoin and gold are considered safer than fiat money, because neither can be diluted or debased. Since most economies have tackled the 2020 lockdown crisis with freshly printed national currencies, inflation is on the way. Hence, safe havens like precious metals and their digital alternatives are highly appreciated. However, since mid-2020 the price of gold started rising at a much more moderate pace than expected. This tendency is attributed to the fact Bitcoin has now replaced gold as the hard currency of choice. There are few reasons for that: BTC is liquid enough, under secure custody, decentralised, easier to store, and has a guaranteed limit on supply.
New highs are on the way
It’s hard to predict the exact price of any asset on the volatile crypto market. However, most experts agree that BTC will rise in the long run. Even the most moderate assumptions are holding $100,000 per coin plausible. In terms of gains, Bitcoin is the best-performing asset of the last decade. Per CNBC calculations, from January to mid-February 2021, the cryptocurrency has surged more than 63%, after quadrupling in value in 2020. Even today, after the biggest pullback to a three-month low, the YTD returns on BTC assets equal over 55%.
Its adoption and acceptance is growing
Although Tesla will no longer accept Bitcoin over climate concerns, it’s still possible to purchase a vehicle in some places using Bitcoin. Many major companies like PayPal, Microsoft, Sotheby’s, as well as fast-food chains and food retailers accept BTC either directly or via partnerships with various crypto platforms. Both Visa and Mastercard are working towards embracing BTC.
Thus, Visa Crypto APIs empower users to buy and sell Bitcoin or participate in new crypto features. At the same time, Visa is developing a new credit card in partnership with cryptocurrency startup BlockFi that offers rewards for purchases with Bitcoin. Mastercard has partnered with Gemini to create a credit card with real-time crypto rewards as well. Even major Wall Street investment banks and mutual funds now offer Bitcoin investments to select customers. According to Coindesk, BTC adoption and network activity have still been growing this year despite the popularity of altcoins, Doge, and similar meme assets.
It can become more sustainable
In addition, many big institutional players believe in Bitcoin’s future enough to help the asset become more sustainable. For instance, the fintech giant Square that supports BTC within its Cash App along with the fund manager ARK Invest argued Bitcoin could be the key to solving the clean-energy problem. According to this joint research, Bitcoin could not only use the sustainable mining processes but also incentivise the renewable energy industry in general. Square also launched a $10 million Bitcoin Clean Energy initiative to invest in companies that promote using clean energy for Bitcoin’s supply chain. For the time being, BTC mining already involves alternative energy sources. Rough estimates of Bitcoin carbon-neutral energy consumption range from 39% to 73%.
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