There is a lot of talk these days about Bitcoin and its potential as an investment. Some people are convinced that it is the next big thing, while others believe it is just a bubble that will eventually burst. So, what is the truth? Is Bitcoin a good investment or not? In this blog post, we will look at the pros of investing in Bitcoin.
Let’s take a look at these pros.
- Easy Transactions
There are other forms of payment. But the cons of card payments, wire transfers, and other methods are transaction costs. These costs can be high when transferring large sums between countries.
This makes Bitcoin ideal for international transactions, and it is the best way to send money across borders or even continents. If you want to trade bitcoin, you must pick the right exchange platform like Bitcoin X.
- Low Fees
The transaction fees for sending Bitcoins is minimal. There are no costs associated with signing up and using a Bitcoin exchange, unlike opening a bank account in another country, which would require a minimum deposit.
Transaction costs when converting from national currencies to Bitcoins on exchanges may be high but vary depending on how much you want to buy. But because there’s no risk of the charges being rejected, there’s no need for credit accounts or payment methods that allow chargebacks.
- Bitcoin is highly divisible
The minimum amount you can transfer or spend in a single transaction is one hundred millionth of a bitcoin (1 Satoshi). There is no limit to how many bitcoins you can own today or in the future because there won’t ever be more than twenty-one million coins in existence.
So, if you start with 0.00000001 BTC and it goes up by four decimal places every time, then your portfolio will still be worth over 1 million dollars even if that was increased by a million times.
- Bitcoin is deflationary
This has a couple of implications, but the most important one for investors is that Bitcoin can’t be in a bubble. Because it’s limited in supply, when demand goes up, its price will have to rise until it reaches equilibrium with the new demand. Otherwise, there will be shortages and people willing to pay more – two things that indicate that its price may continue to rise.
- High Potential Returns
Bitcoin’s value as a currency is extremely volatile and increases at rates similar to many speculative stocks. However, unlike most speculative stocks with limited market size and small initial investment amounts required, Bitcoin has no limit on how much can be invested. The potential returns are orders of magnitude greater than any stock currently available today.
- No Government Regulations
One of the major factors behind Bitcoin’s massive price appreciation is that it operates outside of government regulations. This means its value does not and cannot be tied to any government, and thus no central authority (e.g. US Federal Reserve) can control its worth or value.
It works very much like gold in this regard – only 21 million bitcoins will ever be ‘mined’ (created), after which there will be a permanently fixed supply with no way to increase this number (unlike fiat currencies such as the dollar, where the federal reserve can print more dollars).
The Bottom Line
Investing in bitcoin may seem very risky, especially if you have been brought up being told that “money doesn’t grow on trees.” However, there are benefits of investing in digital currency that you can look above.