1. Bitcoin is Real
Yes, that’s right!
For those of you who still think that Bitcoin is some kind of scam, please be informed that Bitcoin is in fact a real digital currency that millions of people use everyday!
In more precise terms, Bitcoin is a cryptocurrency, a type of digital currency in which transactions are verified and records are maintained by a decentralized system rather than by a centralized authority like a Central Bank or the Treasury.
2. Bitcoin can Surge More than $300,000
According Tom Fitzpatrick, a strategist at Citigroup Inc, the American multinational banking and finiancial giant, Bitcoin could potentially soar to as high as $318,000 in the coming year.
Another projection by Michael Novogratz, CEO of Galaxy Investment, predicts Bitcoin reaching as high as $60,000 by the end of 2021.
These predictions can be attributed to the change in Bitcoin investment trends, which have shifted from frenzied individual investors buying Bitcoin for short term gains to more institutional entrants hodling and investing in Bitcoin for long term profits.
In addition to that, Novogratz asserts that the rise in the value of Bitcoin is also backed by the fears of unconstrained printing of money by central banks and governments of several developed countries. This will be discussed in more details below.
Bitcoin was already over $37,000 the last time we updated this article on January 7 2020.
3. Bitcoin Adoption is Increasing
Owing to its sky rocketing popularity in recent years, the global adoption of Bitcoin is also acclerating.
As an example, consider the gradual rise in the number of users of the Blockchain.com wallet, which according to the website of the company, has increased from 64. 7 thousand users in December 2012 to more than 62.5 million users in December 2020.
And that’s just one app!
The actual growth in the size of the Bitcoin community is much larger than that!
In a recent development, PayPal also announced that it would be allowing its users and merchants to buy, sell, hold and accept Bitcoin and other cryptocurrencies as a means of payment.
This would mean that all of PayPal’s 350 million users will now have easy access to Bitcoin, if they would like to buy, sell or hodl the cryptocurrency.
Additionally, PayPal’s 20 million active merchants will now be able to accept Bitcoin in exchange for their goods and services.
Apart from PayPal, other services such as Venmo, Square and Cash App also deal in Bitcoin transactions.
In addition to that, there are a growing number of merchants and vendors including supermarkets, hypermarkets, retail outlets, coffee shops, web hosting companies, marketing companies (including us) and many other companies and sellers who have started accepting Bitcoin as a means of payment for their goods and services.
As a matter of fact, there is actually a search engine, spendabit.co, which you can use to discover merchants who accept Bitcoin as a mode of payment.
“In a world of social media, Bitcoin is social money”
– Michael Novogratz
4. Buying and Selling Bitcoin is Easy
With time, it is becoming more and more easier to buy and sell Bitcoin.
You can also purchase Bitcoin on Online Bitcoin Exchanges like Paxful.
If you want to sell Bitcoin, you can sell it on Bitcoin Exchanges like Paxful.
5. Bitcoin market is becoming more Liquid
The liquidity of an asset is its ability to be converted into cash on demand.
The foreign exchange market, for example, is the most liquid market while assets like real estate are not very liquid or illiquid.
To understand how Bitcoin is becoming more liquid over time, consider how the daily trading volume of Bitcoin has increased from less than $100 million ($100,000,000) in 2014 to over $71 billion ($71,378,606,374) in one day in late 2020.
Add this to the increasing number of Bitcoin exchanges, and the growing adpotion of Bitcoin, as explained above, and you’ll understand why Bitcoin is becoming more liquid.
6. Bitcoin is Legal in Most Developed Countries
As of 2020, Bitcoin is legal in most developed countries inlcluding:
- United States of America
- United Kingdom
- South Korea
- South Africa
It is also legal in other developed and developing countries and territories including:
- Hong Kong
- New Zealand
- Czech Republic
7. Wall Street is going Crypto
As cryptocurrency continues to gain momentum, more and more Wall Street investors are starting to invest in Bitcoin, further driving up its value and boosting its liquidity.
In fact, Bitcoin is garnering so much attention on Wall Street that S&P Dow Jones Indices, a division of S&P Global Inc, has announced that it will be launching cryptocurrency indices in 2021.
In addition to that, it has been reported that, Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange is developing a bitcoin trading platform of its own.
This growing interest in Bitcoin is further causing Bitcoin prices to soar.
8. Bitcoin’s Value will keep on Growing in the Long Term
If you compare Bitcoin to other investment assets like gold, you will be able to better understand why experts believe that Bitcoin’s value will continue to grow.
For example, according to this article on Forbes, 3,300 tons of gold is produced every year, which equates to about $200 billion of newly produced gold that must be purchased by buyers.
If the supply of any commodity increases, its price decreases.
That’s a simple rule of economics!
This is what prevents gold prices from skyrocketing in the first place.
In case of Bitcoin, its supply is limited to 21 million bitcoins or 21,000,000 BTC.
This means that there can only be 21 million Bitcoins at most.
To put this figure into perspective, at the time of writing this article, there are about 18.5 million Bitcoins currently in circulation.
If a commodity is scarce, or if the supply of such a commodity decreases, its price will increase.
This is exactly why Bitcoin’s value will continue to increase in the long term.
Why do you think limited edition watches and limited edition cars are so much more expensive than other widely available models?
It is due to the exact same reason as explained above: they are available in limited quantities only.
Just like Bitcoins which are limited to 21,000,000 coins.
9. US Dollar is on a Decline
For the same reasons that we have just explained, the USD is continuously devaluating due to its ever increasing supply.
This is because the US government keeps on printing more and more money, in a process known as Quantitative Easing.
As a matter of fact, due to the economic recession caused by the COVID-19 pandemic, the US Federal Reserve announced on March 15, 2020 that it will be increasing the supply of the US dollar by over $700 billion.
Every time the supply of money is increased, its value decreases and inflation occurs as the purchasing power of the currency decreases.
As a matter of fact, the dollar has lost 96% of its value since 1913!
Experts at J.P. Morgan Asset Management also predict a negative outlook of the US dollar.
“We continue to believe that over the next 10 to 15 years, the dollar will weaken…”
– Jack Manley, J.P. Morgan Asset Management
Then why not invest in an asset like Bitcoin, the supply of which is limited, as discussed above.
10. Bitcoin Preserves Your Wealth during Inflation
Due to inflation, the prices of goods and services increase.
If governments continue to print fiat money like US Dollar, Euro and Yen during inflationary times, the value of these currencies will decrease.
So while the prices of goods and services are increasing, the purchasing power of your income is decreasing.
To illustrate this, let’s say that you live in the United States and that you earned $100,000 in the year 2017.
According to the statistics, the annual inflation in 2018 the United States was 2.44%.
This would mean that your expenses increased by 2.44% on average.
Therefore, to be able to retain your purchasing power and maintian your standard of living, your salary in 2018 should have been increased by 2.44% as well, to $ 102,440!
But that does not happen, does it?
This is where Bitcoin comes in.
Due to its limited supply, the value of Bitcoin can only increase, and when the prices of goods and services inflate, the increases in the value of Bitcoin over and above the inflation rate will make sure that your wealth increases with time as well.
11. Bitcoin is becoming a Store of Value and Wealth
If Bitcoin can protect you against inflation over a long period of time, as discussed above, by maintaining its relative value, then Bitcoin can also be considered as a store of value.
Furthermore, if you compare Bitcoin to Gold, in terms of portability, you will agree that Bitcoin may actually become a better long term investment than gold.
Simply because Bitcoin is much easier to store and send to other, while gold must be physically stored and transported in exchange for goods and services.
In addition to that, if you consider the long term growth potential, Bitcoin may become a promising investment, if it continues to grow the way it has so far.
As a matter of fact, Bitcoin has grown more than 200,000% from 2013 to 2020!
Compare that to gold, which has had roughly 30% growth in value during the same period.
12. Bitcoin can be Stored Safely in your own Wallet
Can you imagine carrying $100,000 dollars in your pocket?
No one can.
But if you had that much worth of Bitcoin, you could carry it with you all the time!
Unlike fiat currency or gold, which must be stored physically in vaults requiring a high degree of security measures, Bitcoins can be safely stored in your own personal Bitcoin wallet, using encryption and blockchain technology.
A Bitcoin wallet, which comprises of a public address and a private key, can either be a hardware wallet or a software wallet.
A hardware wallet, as the name suggests, is a hardware device that stores your Bitcoins. It looks like a USB stick with a screen and some buttons.
Software wallets, on the other hand, are software applications that store your Bitcoins and are available as web applications, mobile applications and desktop applications.
Most hardware and software wallets provide a relatively high level of security when it comes to storing Bitcoin.
This means that you can store unlimited amount of Bitcoin in your hardware and software wallets, which only you can access and control.
That brings us to the next advantage of Bitcoin: nobody can confiscate it from you.
13. Your Bitcoin cannot be confiscated
Since you can safely store your Bitcoins in your own Bitcoin wallets, without having the need to store it with third parties like banks and safety deposits, nobody can take your Bitcoin from you!
Compare that to fiat currency, which is fully controlled by governments and can be confiscated any time the government wants.
Apart from governments, other financial institutions like banks and online payments companies like PayPal can and do in reality confiscate money any time they deem necessary!
Even other assets like gold and real estate can be confiscated!
As a matter of fact, during the economic crises of the 1930s, the United States government outlawed gold ownership, and ordered Americans to hand over gold to the federal government.
Americans, who did not return gold, were to be arrested on criminal charges and faced up to 10 years in federal prison!
This is where Bitcoin comes in, with its decentralized system, which no government or entity can control.
14. Sending Bitcoin Internationally is much cheaper
In today’s digital economy, it is becoming increasingly more important to have a medium of exchange that costs less than the currently available options.
Standard wire transfers and international purchases incur high fees and exchange costs.
Since there are no banks and intermediaries involved in the transfer of Bitcoin, sending Bitcoin locally or internationally is much cheaper than sending fiat currencies like dollars and euros.
Moreover, transfers in Bitcoins are also much quicker, further eliminating costs and inconveniences associated with money transfer.