5 Reasons to Invest in Bitcoin

With predictions exceeding $100,000 for one bitcoin, here’s why analysist may be right

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. 

If you are looking for an easy way to buy bitcoin with zero fees then make sure and download the free Robinhood app. It takes 30 seconds to create an account and you can start trading bitcoin right away. First time users even get a free stock worth up to $200.

Investors predict one bitcoin is going to be worth $100,000 in the next couple years.  Here are 5 reason they may be right:

Competitive Advantage 

A man in a suit lifting weights with bitcoin labeled on the barbell.
Bitcoin holds the largest market advantage in cryptocurrency

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. 

Psychological Interest 

A girl holding a tablet with the words Bitcoin News - and bitcoin price index

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. 

Privacy 

Anonymous hooded man holding up a bitcoin signifying privacy
Bitcoin can be used to keep wealth, income, and purchases private

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. 

Blockchain Technology 

man in suit holding a letter showing bitcoin connected to users through blockchain technology
Blockchain technology is at the beginning stages with exponential growth potential

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. 

Cash Devaluation 

Bitcoin with the greater symbol open to it and the U.S. dollar on the other side. This shows bitcoin is greater than the dollar.
With rising inflation, bitcoin is a great way to hedge against devaluation of the U.S. Dollar

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

Want to start investing in bitcoin?

Download the free Robinhood app. This app gives you access to the world’s top cryptocurrencies, stocks, EFT’s, and options with no transaction fees whatsoever. They even give a free stock valued up to $200 just for signing up.

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