The financial market has boomed in 2020-21. Let us take a look back in time and compare how the markets were performing a year ago. In March 2020 the Nifty 50, an index of the National Stock Exchange was at around 8000 while currently, it is close to 16000 points. However, there is a particular financial market that witnessed robust growth – the cryptocurrency market.
In March 2020, Bitcoin was trading around $5000 and it touched close to a whopping $65000 in 2021!
As an investor, a wise decision would be to never put all your eggs in one basket. It is always advisable to invest your money in different avenues. In this post, we are going to discuss a few reasons why you should invest in Bitcoin in 2021.
Reasons you must invest in 2021
● Acceptance of Bitcoin:
Within a decade of its inception, Bitcoin has gained considerable recognition when it comes to investment instruments. It is not only that the investors have started valuing Bitcoin, we have seen well-known people backing Bitcoin as a worthy cryptocurrency. Businesses have started using Bitcoin for making as well as accepting payments.
● Growth of investment in Bitcoin:
The price of Bitcoin moved by over 13 times within a year. It looks like a clear indication of the rising demand for Bitcoin among investors.
Retail investments in Bitcoin have also gone up substantially. Investors have started using different platforms and brokers for investing their money in Bitcoin.
● Digitalisation at its peak:
The more we move forward in time, the more we realise that the world is growing blazingly fast. Especially the technical advancements that are taking place clearly indicate that the future is indeed digital. Investing in a digital currency like Bitcoin is an investment in the future that can generate potential returns.
● Correction in Bitcoin:
One of the most commonly heard phrases for investment is ‘buy the dip’. After touching its all-time high of 64,000 USD, Bitcoin witnessed a significant correction in its price. As a result, the price of Bitcoin dropped and it is trading now at nearly 33,000 USD i.e., nearly half its all-time high.
If you are looking for an opportunity to invest in Bitcoin, this might be the right time.
● Suitable for all macroeconomic conditions:
When there is an economic slowdown, the price of shares tends to fall. However, that is not the case with Bitcoin. This makes you shockproof to such situations if they occur.
● Easy evaluation of stock-to-flow ratio:
As the name suggests, the stock-to-flow (S2F) ratio is an excellent indicator of the supply of a particular instrument, which in this case is Bitcoin.
The S2F ratio helps in identifying if there is a scarcity of the instrument in the market. When there is a scarcity, the price generally tends to go up. This can be a good indicator of an investment opportunity.
In the case of Bitcoin, blockchain technology makes it easier to identify the exact amount of Bitcoin in circulation. It becomes quite easy to evaluate if there is any scarcity. The information is so transparent that you can actually find it out on any broker’s platform without any issues.
Advantages of investing in cryptocurrency
There are many advantages of why you should invest in Bitcoin or cryptocurrency. In many ways, it is true that investing in cryptocurrency markets is similar to investing in the stock market. However, there are many more advantages of why you should invest in Bitcoin instead of the stock market. Let us look at some of these advantages.
● High liquidity:
Keeping in mind the development of global trading platforms, online brokerages, and exchanges, Bitcoin has become one of the most liquid financial assets to invest in.
Furthermore, owing to the high cryptocurrency market cap, the high liquidity of Bitcoin can turn into a very profitable investment. In terms of long-term investment as well, cryptocurrency markets give a great return and are a viable option.
● Cryptocurrency requires Minimum trading:
When you invest in stocks, you need to have owned a certificate or license. Trading a company’s shares requires you to visit a broker. However, to invest in Bitcoin, you do not need to do anything like this.
It is relatively easy to buy or sell Bitcoin on digital exchanges and deposit them in your online wallet. Bitcoin transactions are immediate, unlike the transactions of the stock market, which may take days to several weeks to settle.
● Possibility of digital storage:
One of the biggest advantages of cryptocurrency markets and of investing in Bitcoin is that they are stored digitally. Cryptocurrencies are less likely to be subjected to hazards like hardware failures or fires as they are stored in a decentralized structure of cryptocurrency ledgers.
This data is kept off-site, and it is also constantly being duplicated all around the world. This means that your money is not kept in one or two banks that are subject to failure or natural disasters.
With the high cryptocurrency market cap, the many advantages of investing in Bitcoin have opened up various cryptocurrency markets today. It is best to invest in 2021 to gain the maximum benefit from such transactions.
Online cryptocurrency course by Unluclass
We believe that you were able to understand why it is a good time to invest in Bitcoin. However, if you are looking to grow your crypto knowledge, we have something for you. We will soon be offering an online cryptocurrency course on unluclass.
This course covers various aspects of cryptocurrencies that you should know before starting your investing and trading journey.
You will be learning about types of cryptocurrencies, cryptocurrency portfolio management, etc. This specially designed course is a complete cryptocurrency information package. Check our website for more information on this upcoming course. Stay tuned!