Ten years ago, you would not find virtual currencies in mainstream finance news. Today, Bitcoin and cryptocurrency feature prominently in news cycles. Such is the progress this industry has made in that timeframe.
The significant change in attitude is because of how much the public has embraced cryptocurrencies. Tens of millions own and trade cryptocurrencies globally. This figure was a substantial upgrade from ten years ago when Bitcoin was a fringe asset for internet nerds.
That said, many still don’t understand cryptocurrency. For each milestone that the asset breaks, interest in how to buy bitcoin and many other fundamental aspects continue to grow. Therefore, people looking for ways to become successful entrepreneurs have a viable solution in Bitcoin.
Why 2020 Was a Massive Year for Bitcoin
Last year, Bitcoin had a year for the history books. This rally was in a year that saw unprecedented economic upheaval due to the Coronavirus Pandemic. Bitcoin hit a low of $4,700 in mid-March 2020 before having a solid fourth-quarter to close just below $30,000.
In mid-May 2021, Bitcoin seems to be stuttering. This development comes off the back of China’s regulatory crackdown on Bitcoin handling. Still, prices are well above $35,000. This mark still makes Bitcoin the best performer over the twelve months, by a country mile.
The major reason for Bitcoin’s explosive rise was the influx of large-scale institutions such as corporations, pension schemes, endowment funds, and investment trusts. In the 2017 rally, Bitcoin rose primarily because of retail investors in their masses. Institutions come with significant capital and add credibility to an asset. The most influential investors in Bitcoin are US companies Tesla and MicroStrategy. This level of institutional adoption is an indication of Bitcoin moving mainstream.
Even former skeptics like banking titan JP Morgan are now projecting a positive future for Bitcoin. This institutional thawing was the fundamental reason for Bitcoin’s rally.
Countries have reacted differently to the Bitcoin phenomenon. Portugal is viewed as a crypto-friendly jurisdiction because its regulations are favorable. The most significant reason for the enthusiasm is that Portugal has no tax on crypto-earnings. In contrast, the USA treats cryptocurrencies as property, and transactions are subject to capital gains taxes.
Bitcoin Is a Profitable Investment for the Future
Some analysts saw Bitcoin hit $50K and proclaimed it the new ceiling for this asset. Has that been said before?
Bitcoin was never supposed to go past $1,000, $10,000, even $20,000. These ceilings end up becoming the floor each time Bitcoin goes on a tear.
Casual analysts make a mistake by equating Bitcoin volatility with doomsday. For perspective, Bitcoin rose to almost $20,000 in early 2018 before tumbling down to $3,000 the same year. Many short-term investors obviously suffered.
However, long-term charts show an asset that is gradually ascending. At its core, Bitcoin is an alternative asset to traditional currency. Bitcoin has a fixed supply, much like digital gold. This fixed supply of 21 million creates an element of scarcity that bodes well for Bitcoin. Most of the Bitcoin supply is already in circulation, meaning that it will continue to get more valuable.
In times of monetary instability, Bitcoin can provide an excellent hedge asset against inflation. The European and American economies have shown that they are not immune from financial crises. Bitcoin is right there to create a hedge asset, which is the best bull case for Bitcoin investment.
There are many channels to trade Bitcoin. Brokerage platforms like eToro offer versatility and multiple trading channels.
A person can do day trading, which depends on momentary price movements or long-term investments. These platforms contain valuable resources to learn trading and even demo accounts to test a trading strategy.
The beauty of internet investments is that you can learn from scratch with all the resources available.
The Big Picture: Bitcoin Is Not Done Yet
There is no doubt that Bitcoin has surpassed expectations every step of the way. That said, there is still more to come. People can get carried away by momentary events.
The fundamental trait about Bitcoin is that it rewards those who hold their ground over the long term.
It was one of the best performing assets last decades and is likely to replicate this trend.