If you are familiar with Bitcoin, you may have heard of how it was able to reach its all-time high of near $20K in 2017. Though it had a major correction losing more than 80% of its value in the next year, it is slowly recovering. Today, there are plenty of other cryptocurrencies that you could invest in. If you are someone new, why should you take a closer look at digital currencies and even consider investing in one?
First, you have to consider the fact that it is decentralized. Though not all digital assets are decentralized, those cryptocurrencies such as Bitcoin that is controlled by no one is something worth looking into. Why? First, you don’t have governments that can dictate this particular currency. It is not tied to any government. This is the same reason why during an economic crisis, Bitcoin price goes up along with the other cryptocurrencies. Animal Medicines talks about all the products you can now buy with cryptos.
Next, you also have to consider the number of Bitcoin. Let’s remember that Bitcoin price could dictate what happens to the other cryptocurrencies out there. In an entire lifetime, there are only 21 million BTCs. It means that the longer Bitcoin lasts, the lesser the chances that you can own this cryptocurrency. Given the law of supply and demand, it is possible that its price will skyrocket over time. A lot of people in the crypto niche these days are waiting for the next halving.
The halving pertains to the less reward given to Bitcoin miners. When this event takes place, there is a chance that Bitcoin price is going to go up.
Another important reason why you should start taking cryptocurrencies seriously is the fact that even big players such as JP Morgan and Facebook are now considering cryptocurrencies. It only means that there is a chance that we are going to see the adoption of digital assets sooner than later. Though Facebook is currently in hot water after it announced Libra, it only shows the potential of cryptocurrencies. You can even use them to buy things online like a combination microwave.
Could we be seeing more institutional investors in 2020? This could happen given the fact that regulators are also making their move. The SEC is already taking a closer look at ICOs that have given a bad name for the industry as a whole.
Though the crypto industry is still a long way to go, there is always the chance that it is going to stay. If you invest now, it only means that there is a potential that it could still go up. Unfortunately, you also need to know the risks if you ever get into Bitcoin and other cryptocurrencies. You will have to take into consideration the fact that it is a highly volatile asset. You could lose 80% of its value in a matter of 12 months. For a lot of people, HODL isn’t exactly a good investment strategy.
If you invest in cryptos, be sure that you can invest what you can only tolerate losing. There is always the risk that cryptos are going to crash. However, with the direction that it is currently taking, more people are expecting for cryptos to last.