If you have been researching Bitcoin, you have come across HODL. This meme started as a typo for hold on an online forum. The crypto community found this word amusing and began using it to denote holding instead of selling the cryptocurrency.
Bitcoin is naturally a volatile asset, with prices changing dramatically. For that reason, some people wonder whether Bitcoin is worth investing in. with more crypto exchanges like the Bitcoin trading software emerging almost every day, buying and selling this crypto asset is now easier than ever. Thus, investing in Bitcoin may appear like a no-brainer compared to buying and selling stocks.
Bitcoin’s hype from social and conventional media makes it look like the hottest thing to buy. Many people want to buy Bitcoin to avoid missing out. Unfortunately, some individuals have blindly lost significant amounts of their hard-earned money for trading Bitcoin. At the same time, some people have become crypto millionaires from investing or trading Bitcoin. So, why should you buy Bitcoin as an investment?
Bitcoin Can be a Store of Value
Bitcoin is naturally volatile. Therefore, some people don’t see it as a stable value holder. But, this virtual currency has proven its ability to hold or increase value since its inception. If somebody bought Bitcoin and held it in their crypto wallet since 2010, they can sell it at a higher price today.
Crypto experts predict that Bitcoin value will continue to increase until miners produce all the 21 million coins. Therefore, anybody buying Bitcoin and keeping it in their crypto wallet today will eventually sell it at a higher price. On the other hand, stocks and other conventional assets lose their value due to economic turmoil. Thus, they may not provide good value storage.
Bitcoin Could Be an Inflation Hedge
Many people consider Bitcoin an inflation hedge and digital gold. That’s because cryptocurrency has a built-in scarcity. Miners will stop minting new coins after hitting the 21 million coins mark. Therefore, this cryptocurrency’s value will increase as its demand rises due to mainstream adoption.
Bitcoin works as an inflation hedge since its protocol limits the number of coins that can ever circulate. Some people believe that portfolio holdings diversification and inflation fears drive Bitcoin’s prices. Also, Bitcoin is gradually becoming a digital currency that people use regularly.
Also, not all cryptocurrencies can be an inflation hedge. That’s because they don’t have scarcity in their algorithm, meaning there are inflationary since they don’t have a maximum amount.
Participating in Decentralized Banking
Peer-to-peer decentralized ethos is partly the reason people love Bitcoin. Essentially, Bitcoin facilitates permissionless banking. This virtual currency brings a new consumers generation to the algorithmic money’s digital economy. Theoretically, this eliminates the need for centralized banking and the associated oversight and fees.
Smart contracts mainly make a decentralized ecosystem or even world possible. An open-source, coded algorithm that users see on the blockchain facilitates the enacting of their instructions.
Investing in Bitcoin could make you part of the future financial infrastructure and technology. Although Bitcoin is a volatile asset, it could become an acceptable digital currency. More people want to own and use this virtual currency due to its benefits over conventional money. What’s more, several platforms enable people and enterprises to invest in Bitcoin and earn passive income. Buying Bitcoin as an investment means you don’t rush to sell your digital coins, whether the price increases or drops. Instead, you hold your tokens for the long term. And this could earn you significant returns since this cryptocurrency has shown price increases since its inception.