Should you still invest in Bitcoin or too late?

Josh Althauser is a tech entrepreneur and open source advocate focusing on providing mentorship for startups due to their marketing technology. You could interact with him on Twitter.

Bitcoin's value is soaring. Over recent months, the cryptocurrency has hit record highs. In early May, the open-source digital currency ballooned to almost ₦1.14 Mln ()$3,000 a coin. Last May, one coin fetched only ₦171K ($450). Certainly not this growth an immediate trend. Bitcoin's value has been steadily increasing since its inception in 2008, nearly ten years ago. Still, many remain hesitant to invest.

The theft of a huge selection of tens of thousands of Bitcoins from the now-infamous Mt. Gox can still haunt investors. Or probably the volatility, whilst the Bitcoin market is 26 times more volatile compared to S&P 500, and the possible lack of governmental oversight have speculators forecasting disaster. This is understandable as Bitcoin isn't backed with a precious metal, a nation or even a bank. It's regulated by sentiment alone. Although you can find clear advantages to a market structured similar to this, you can find serious obstacles and dangers that can not be ignored. If you're ready to stomach the chance, however, buying Bitcoin can be a worthwhile endeavor.

Should you still invest in Bitcoin?

1. It's experiencing incredible growth.

The currency suffered greatly as a result of theft of an incredible number of dollars worth of Bitcoins in 2014, but has recovered quite quickly in the span of 2 yrs and is currently experiencing rapid growth.

In February of in 2010, Bitcoin surpassed one troy ounce of gold in value. It's now surpassing the worthiness of gold by even larger margins. In the event that you happened to invest meagerly in Bitcoin in 2011, you'd have seen massive returns. Like, an ₦38,000 ($100) investment might have garnered you approximately ₦228 Mln ($600K) in the event that you sold this May.

2. The supply is fixed.

21 mln Bitcoins are scheduled for release. No longer, no less. It is probable that each Bitcoin will soon be in distribution around the season 2140. Annually, the amount of Bitcoins slated for circulation is halved, slowing the procedure significantly. A currency with a fixed supply seems counterintuitive to some. Fiat currency is printed as needed. More cash is circulated as time goes on.

Based on Bitcoin's website, “Bitcoin is designed to inflate in its early years and become stable in its later years... With a well balanced monetary base and a well balanced economy, the worthiness of the currency should remain the same.” Although it could be predicted that the lower supply results in hoarding and deflation, this probably won't function as the case for the currency as the fixed supply is expected.

3. Bitcoin might be a highly effective solution to diversify.

Investors are just starting to take Bitcoin more seriously. In 2011, Bitcoin was virtually unknown. Now, it regularly appears in the mainstream news. Kiosks specialized in trading Bitcoins have sprung up. Increasingly, digital currency will be employed for everyday transactions, international trade and as investment vehicles.

Adoption rates have risen and rely upon the digital currency has strengthened steadily. Cryptocurrency itself is widening as lots of competing alternatives predicated on Bitcoin technology (aptly named altcoins) flood the market. JP Morgan Chase, Intel and Microsoft even came together to back the Blockchain currency Ethereum.

“More and more investors are searching for unique opportunities outside the original arena,” writes Bobby Cho for The Street.

“[B]itcoin is emerging as a feasible alternative asset class for institutional and retail investors alike. It posseses an enormous quantity of investment potential and is unlike any investment product on the planet today.”

Investment vehicle

Bitcoin has grown exponentially. But, by exactly the same token, the currency's upward climb hasn't been without setbacks. Mt. Gox underscored fears in regards to the mercurial nature of the peer-to-peer currency. An incredible number of Bitcoins were lost likely because of undetected theft, leaving supporters and skeptics alike with concerns about its security and long-term viability. However, it has brought these losses in stride. The Blockchain currency has surged above its pre-Mt. Gox market value in 2010, experiencing two all-time highs in the span of several months.

The first public ledger provides unique opportunities to investors that are prepared to steel themselves against downturns and remain calm during record surges. The method of getting Bitcoins is fixed, that might stabilize the currency over time. Moreover, faith in Blockchain currency is expanding as giants like JPMorgan Chase, Intel and Microsoft have shown their support of cryptocurrency. Therefore, Bitcoin happens to be experiencing wider adoption and will be taken more seriously being an investment vehicle.

If you're intent on adding Bitcoin into your portfolio, you will need to exercise caution. When buying cryptocurrency, you must only risk what you're prepared to lose. Continue steadily to conduct your own personal research, monitor Bitcoin's growth and measure the currency's weaknesses. Shrewd investment bolstered by thorough research could, in reality, result in immense returns.


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