Bitcoin (BTC), the world’s first and largest cryptocurrency by market cap, soared above $33,000 on the third day of January, 2021. It was almost three years ago when its price surged 20x, reaching its all-time high.
Now that the most famous cryptocurrency in the world reached its new all-time high, many investors are attracted again to invest, especially after big companies increased their bitcoin investments.
PayPal purchased 70% of all newly mined bitcoin after the company announced in October that they would allow their users to buy, sell, and hold bitcoin and other crypto assets using their PayPal accounts.
Another digital payment giant, Square Inc., also bought $50 million worth of bitcoins in October. The company believes that “cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system, which aligns with the company’s purpose.”
Top 3 Reasons Why People Invest in Bitcoin
1. Attractive Potential
From its launch in 2009 until 2021, Bitcoin has been growing despite price fluctuations and volatility. Crypto investor Anthony Pompliano believes that bitcoin could surge to $100,000 by the end of 2021.
Likewise, ARK CEO Cathie Wood mentioned that if all institutions would assign a mid-single-digit allocation to Bitcoin, its value would increase tremendously. “The cryptocurrency could rise to somewhere in the $400,000 to $500,000 range,” she said during Barron’s event.
2. Blockchain Technology
Blockchain technology transforms the digital world with more transparency, higher security, and faster transactions. Bitcoin and other cryptocurrencies’ platforms are built on blockchains.
More and more industries are adopting blockchain technology because of its efficiency and immutable benefits. As the world recognizes this technology’s advantages, it will eventually be more open to bitcoin and other crypto-assets.
3. Alternative Investment
Bitcoin enthusiasts consider bitcoin as a digital version of gold. More and more retail investors also allocate a portion of their funds to bitcoin and other digital currencies aside from stocks and commodities.
Top 3 Reasons Why People Don’t Invest in Bitcoin
1. Highly Volatile
Cryptocurrencies are highly volatile assets and very risky. Their values can’t be based on fundamentals, and their prices fluctuate due to supply and demand, speculations, and hope.
2. Not Regulated
A central government does not regulate bitcoin. Thus, bitcoin can be banned anytime by any state or country.
3. No Intrinsic Value
Bitcoin lacks intrinsic value. Even investor icon Warren Buffett is not a fan of bitcoin or any cryptocurrency. According to him, “Cryptocurrencies basically have no value. They don’t produce anything. You can’t do anything with it except sell it to somebody else.”
Is It too Late to Invest in Bitcoin in 2021?
It is not too late to invest in Bitcoin in 2021 as long as you believe in its potential and as long as you can handle its volatility. Most importantly, as long as you allocate a small portion of your fund and not all of it.
There is no certainty that bitcoin could reach $100,000 or $500,000, but if that happens, then you’ll be happy that you followed your beliefs and you invested what you can handle to lose.
How to Trade Bitcoin and Cryptocurrencies?
If you’re interested in trading bitcoins and other cryptocurrencies, you can use one of the most trusted online trading platforms, eToro. It provides numerous cryptocurrencies like Bitcoin, Ethereum, Bitcoin Cash, Ripple, Dash Litecoin, NEO, and many more.
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Disclaimer: This content is for information purposes only and should never be considered as a professional advice. Every investor has a different risk tolerance and goal. Always do your own research. All investments have risks. Risk only the money you’re not afraid to lose.