Bitcoin may turn out to be one of the most significant developments in the financial markets in the past few decades. The ability to quickly and anonymously transfer money from one owner to another has far reaching implications for the world’s financial systems.
Though Bitcoin is an important technological advancement, it is also an intriguing investment opportunity. The following information covers five of the many reasons that investors may want to consider Bitcoin coins, as well as Bitcoin stock, as a viable investment option.
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Investors predict one bitcoin is going to be worth $100,000 in the next couple years. Here are 5 reason they may be right:
There are lots of different cryptocurrencies available around the world. However, Bitcoin was the first successful cryptocurrency and is far and away the industry leader.
Being first to market gave Bitcoin a huge public relations advantage. Virtually every investor from young to old has heard of Bitcoin. Conversely, many potential investors cannot name one of Bitcoin competitors.
With a large market advantage, Bitcoin is an attractive investment for those interested in investing in cryptocurrencies.
An investor should never buy an investment because it is ‘cool’ to own. However, there are millions of potential investors in the market who want to own Bitcoins.
While wanting to own Bitcoin as a status symbol is not a wise decision, Bitcoin sees a price premium because people want to own it.
A rational investor may be able to profit from Bitcoin for a number of reasons, including the irrational decisions made by other investors. A similar phenomenon is seen in numismatic bullion coins.
American Eagles, South African Krugerrands and Canadian Maple Leafs all sell well above the intrinsic value of an ounce of their gold or silver composition.
Bitcoin and its stock may also increase in value beyond its intrinsic value, creating a profitable opportunity for investors.
The ability to make private financial transactions that are difficult to track is one of the most appealing factors of Bitcoins.
Bitcoin can allow people to send money to loved ones living under oppressive governments. Bitcoin can be used by those who wish to keep their fortunes private and safe from theft by those in and out of the financial system.
Using Bitcoin reduces the chances of identity theft as transactions do not create a paper or electronic log of the transaction. All of the privacy advantages of Bitcoin work to increase its value and make it a potentially rewarding investment.
The ability to make secure transactions through blockchain is a significant technological breakthrough regardless of the corresponding cryptocurrency.
The process of using blockchain may also add value to Bitcoin as banks and other financial institutions may use Bitcoin and its underlying technology, as a way to transfer large amounts of money safely and privately.
If financial institutions become large buyers and holders of Bitcoins, the value of existing Bitcoins could be pushed up exponentially.
Inflation is a major concern for investors. As governments continue to print more and more cash, the only most likely result is the devaluation of that cash.
As more money enters circulation, cash loses its buying power and things become more expensive. However, Bitcoin creation is controlled by processing power and not governmental whim.
Bitcoins are created through the computer processing of existing Bitcoin transactions. The supply of Bitcoins in circulation does increase over time, but the increase happens in a controlled manner.
The slow creation of new Bitcoins protects the cryptocurrency from devaluation from oversupply. Bitcoin has been responsible for many people making fortunes.
However, potential investors should be aware that new currencies and technologies can be very volatile and rapidly increase and decrease in value. As with any investment, it is important for investors to learn as much as possible about Bitcoin in order to make an informed decision
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