In the past few years, Bitcoin has stood out as one of the top assets to invest in – and it is a primary choice for investors. When it was first introduced in 2009, Bitcoin didn't really have any value. The question is, is Bitcoin still a worthy investment?
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Now, it is worth around $30,000, representing a growth of millions of percent. However, after the challenges that the crypto market has seen during the last crypto winter, investors are wondering what is the best thing to do next to maximize their profits.
So, is Bitcoin still a worthy investment? As such, the question that runs through their minds is whether seeking exposure to the leading crypto is still a good idea in 2023.
Undoubtedly, as the leading digital asset, Bitcoin still remains an excellent option for investors, and there are many arguments that can support the idea of it being a worthy investment. However, it is also worth remembering the market's volatility, which makes Bitcoin risky.
Given this aspect, each investor should ask themselves whether they are ready for a bumpy ride before going into crypto investing fully – only then, they can research the best way to buy bitcoin. In this blog, we will highlight some essential aspects of Bitcoin that prove this cryptocurrency is here to stay.
Bitcoin is an excellent medium of exchange
Is Bitcoin still a worthy investment? When asking yourself whether you should buy Bitcoin, you should also explore the digital asset's use case as a medium of exchange.
While fiat money is currently the most common medium of exchange utilized, including euros, dollars, and pounds, Bitcoin has also become incredibly popular, enabling people to purchase services and products.
And one of its greatest advantages is that it doesn't involve any third parties. Therefore, individuals can send and receive Bitcoin without concerns about the regulatory barriers.
Bitcoin can act as a hedge against inflation
Inflation is a problem that affects the world on a global level, but its impact is more dramatic in some areas. For instance, in March 2023, inflation levels in Argentina and Turkey accounted for 104% and 50%, causing the value of citizens' wealth to depreciate.
Inflation increases the living cost dramatically, and this problem is only due to the policies of central banks. When central banks create new cash, the process is called quantitative easing.
Otherwise said, the institutions print new money, boosting the supply, which devalues the currency and weakens the purchasing power of savers. Throughout time, the value of traditional money decreases as inflation levels rise.
However, Bitcoin solves this issue in many ways. Its supply is demanded by code, and since it doesn't involve a point of control, governments and banks can't manipulate the Bitcoin supply.
Instead, every ten minutes, there is a new Bitcoin that enters circulation, and after the block is verified, miners are rewarded 6.25 BTC(namely, 900 new Bitcoins every day and 6,3000 BTC weekly, respectively). This makes the Bitcoin supply predictable and a safe haven against hyperinflation, helping individuals preserve their wealth.
Bitcoin's price trajectory has been impressive throughout the years – in 2021 alone, it delivered a remarkable ROI of more than 60%, which exceeded the global inflation level.
Moreover, the leading digital asset outperformed traditional ones, enabling investors to safeguard their capital in difficult economic times. So, despite the inflation rates worldwide, Bitcoin's historical performance highlights its ability to outpace the increases, thus making it reliable.
The macroeconomic picture for Bitcoin is positive in 2024
Although the scenario may not have been the best for Bitcoin this year, its price could recover slowly starting with next year. It is predicted that the US Federal Reserve will reduce interest rates in 2024, which could take the pressure off the crypto industry and increase investments in BTC.
Draft legislation may also lead to regulatory clarity, reducing uncertainty in the crypto landscape and encouraging more investors to jump into the market confidently. However, the biggest event in 2024 that could trigger the long-awaited bull market is the Bitcoin Halving, which is set to happen on April 24th.
However, it is worth noting that there are no guarantees about when the halving event will take place because it all depends on the block number.
The Bitcoin halving event means that the Bitcoin mining reward will decrease by 50%, making Bitcoin more scarce. And as this happens, the digital asset could go on a prolonged bull rally, generating significant growth and great opportunities for investors.
The last Bitcoin Halving occurred in May 2020, leading to a 17-month rally and Bitcoin's price accounting for 68,000 in November 2021, and generating growth of more than 900%( this means every 1,000 invested lead to gains of 9,000), which is impressive.
Hence, given the factors mentioned previously and the halving event, it's estimated that Bitcoin could reach around 98,000 next year, close to the powerful 100k marker. So, investors should be prepared if that happens so that they can take advantage of the opportunities that may arise.
Is Bitcoin Still A Worthy Investment? – Takeaway
Is Bitcoin still a worthy investment? As highlighted in the blog, a series of events in 2024 could boost the price of Bitcoin, but investors should take everything with a grain of salt and always follow the essential rules of investing.
In other words, you want to ensure all your finances are in order before investing in cryptocurrency and do your research about the market. Throughout its history, Bitcoin has generated substantial growth, making it an appealing investment.
But despite its long-term trajectory, it's worth noting that Bitcoin goes through bearish cycles, and the volatility surrounding it is higher compared to traditional assets, which is an aspect that investors should keep in mind before jumping on the crypto bandwagon.
Risks can be mitigated as long as you have a diversified portfolio – however, not everyone may be prepared for all the challenges in the crypto market( this is especially true for faint-hearted individuals).
It is essential to remember that the crypto landscape is based on prediction, and the truth is that only time can tell whether its price can soar high or decrease dramatically. Either way, it's essential to approach crypto investing cautiously and with the awareness that your investments may not generate the returns you expect.
