Is Bitcoin a Good Investment in 2022?
Cryptocurrencies rapidly transform the global financial landscape, driving the shift towards a digital economy. However, critics are still skeptical about adopting crypto, citing their high volatility as a significant risk to investors. Others are also concerned that digital currencies as Bitcoin operate in an unregulated market.
Despite the above concerns, Bitcoin has continued to gain immense popularity, becoming the largest virtual currency by market capitalization. Crypto enthusiasts predict Bitcoin’s reign over the market will continue, mainly because of its declining supply and growing demand. So, is Bitcoin a good asset to invest in this year? The following article discusses the main reasons why you should invest in Bitcoin in 2022.
Better Growth Prospects
Every investor wants to put their money on an asset with better growth prospects to maximize returns. While several assets have potential growth indicators, Bitcoin offers the best opportunities, with a track record of stellar performance. Bitcoin has also experienced all-time lows like other assets but rebounded quickly, with higher price growth than any other asset.
Unlike fiat money, Bitcoin has a fixed supply of 21 million tokens only, with more than 18 million currently circulating in the market. It also undergoes halving, reducing the rewards issued to miners by half every four years. Those attributes enable Bitcoin to retain a more substantial purchasing power over time.
Experts predict Bitcoin’s price will hit over $300,000 by the end of 2022, indicative of its expected enormous value growth. That hints at the massive gains that investors stand to acquire from trading Bitcoin. The predicted value growth would make Bitcoin more expensive but highly profitable to investors with more extensive reserves.
Perhaps, the main reason why many institutional investors and individual traders increasingly invest in Bitcoin is because of its ease of access and usage. Unlike other assets subject to government and institutional restrictions, Bitcoin is a universal currency without ties to any central entity. Bitcoin users need only a smartphone or computer with an internet connection to send and receive payments worldwide.
Robust Practical Uses
The crypto revolution has inspired the proliferation of several Bitcoin-friendly businesses such as Bitcoin Revolution, bringing cryptocurrencies much closer to the general public. Crypto exchange platforms allow institutional investors and individuals to buy, sell and hold Bitcoin on short term and long-term basis. They also process Bitcoin transactions on behalf of their customers.
Several merchants now accept Bitcoin as payment for goods and services, ensuring greater convenience to consumers. Besides processing payments, Bitcoin is also an asset class used by several investors and companies to diversify their portfolios.
Other companies are also exploring ways to integrate Bitcoin’s blockchain to streamline inventory management, recruitment, remuneration, supply chain management, and expedition of smart contracts.
Resilience to Inflation
Inflation is one of the most severe risks to every investor. According to many experts, government and central banks usually induce inflation by releasing too much money into the economy. That significantly hinders the purchasing power of local currencies, leaving investors with huge, long-standing losses.
Bitcoin avoids such risks because it is a decentralized currency. Besides, it has no ties to any physical commodity that could influence its value. Bitcoin’s ability to withstand inflation makes it a more stable and credible payment method and store of wealth than other assets in the market. That is why many institutional investors hold significant Bitcoin reserves to cushion their portfolios from inflationary risks.
Overall, Bitcoin has unique benefits and shortcomings, impacting its global acceptance and usage in various ways. However, Bitcoin’s ease of access, expected growth, robust, practical uses, and resilience to inflation make it undoubtedly a worthy investment in 2022 and beyond.
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