If you’ve been following cryptocurrency-related news carefully, you probably know that these digital assets have been in the headlines a lot since the beginning of the year.
The reason is that Bitcoin’s value plummeted from over $ 68,000 in November last year to less than $ 20,000 this month.
Due to the decline in the value of the most popular cryptocurrency, you may be wondering whether or not it is wise to invest in it. In the following article, we will take a look at what this currency is, why its value is plummeting, and why you might want to invest in it despite all the news saying otherwise. So let’s take a closer look:
Bitcoin: explanation
Although many think it is complex to understand the concept of Bitcoin, it is not. In fact, it’s as simple as explaining how bank transfers work. As mentioned above, Bitcoin is a type of digital money that can be used like any other traditional currency, but there are some important differences that you need to be aware of. To begin with, it uses the so-called “peer-to-peer” payment plan, but there are no banks that can steal a portion of every transaction made.
This indicates that it is not regulated by any bank, state or government, or financial institution that is traditionally in charge of regulating real money. Secondly, there is no material version, but there is an upper limit of 21 million coins available for mining. Third, since there are no physical copies, they are created online using an encrypted code – a series of letters and numbers. Finally, it is decentralized, which means that no one can know how many coins you have.
Why did the value go down?
The first thing to know is that the value of Bitcoin – and, of course, other digital assets – has fallen since the beginning of this year. The reasons for this change are manifold. For example, there is a lot of uncertainty surrounding the rise in interest rates in America and Britain, which is why many people choose to sell their digital currencies. Also, as we have lived in the aftermath of a global pandemic, the cost of living has risen, causing inflation.
For this reason, investors do not have sufficient capital to invest in cryptocurrencies, especially Bitcoin. Furthermore, China has made cryptocurrency mining and trading illegal, causing a severe blow to the industry. Nonetheless, the value of Bitcoin is expected to rise in the future, and while it does not reach the same value as last year’s November, it might be reasonable to invest in it now.
Why is it wise to invest now?
While there is a lot of negative press and speculation at the moment when it comes to subsidizing Bitcoin and various digital assets, you should know that this year could still prove to be a profitable acquisition – which is especially true when you remember that such shifts have also taken place. in the past. Here are some of the reasons why you might seriously consider investing in cryptocurrencies:
More and more companies are choosing to implement it
You will be surprised at the number of companies that choose to use it as a payment method for their goods and services. Due to this high adoption rate, it might be wise for you to invest in these coins. Also, you should know that over 40% of users have reported having really favorable and profitable results from Bitcoin, so it is sure that it could end up rebounding.
It could be effective against inflation
As we have already mentioned, the global pandemic has also caused global inflation, which means that the cost of living has risen around the world. Since, according to some reports, financial markets and the global economy will experience even greater inflation, it may be smart to invest in something that cannot be controlled by banks, governments and other financial institutions and one of the alternatives to consider is the Bitcoin.
A wide range of exchanges
When Bitcoin first appeared on the market, there weren’t many options when it came to exchanges. However, if you browse the internet today, you find that there are hundreds of exchanges that you can opt for, which means you can find something that suits your needs and requirements.
Safer than other options
With the emergence of more and more digital coins on the market, Bitcoin has remained in the lead, especially as it is known for its security and anonymity. In addition to all the benefits that this particular asset offers to its users, it is worth mentioning that it can be quite beneficial when compared to flat currencies, which means that you need to seriously consider investing in this particular cryptocurrency.
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The offer is limited
The last point on this particular list, but certainly noteworthy, is the fact that there is a fixed supply of coins. What does it mean? It means there are only 21 million Bitcoins available for mining and around 19 million have been mined. This means that there are still 2 million coins left and that, as you continue to mine, it will be increasingly difficult to obtain them and therefore their price will most likely increase.
Conclusion
While many experts believe that Bitcoin will never reach its record value of over $ 68,000, it is safe enough to say that it still remains one of the best investment options today. And, as you can see from our list above, there are some good reasons why it might be wise for you to fund these digital assets.
Since you now know more about this cryptocurrency, why its value has dropped, and why you need to invest in it, you may not want to waste any more time. Instead, you should weigh all the pros and cons of investing in these digital businesses and determine if this is a good investment option for you.