Bitcoin has stood the test of time since its inception. It has gained market stability and dominance making it the most suitable to trade and hold long term. It is characterized by fast transactions especially when you leverage the services of reliable platforms to necessitate its exchange. Bitcoin investments have integrated blockchain technology that ensures safe and transparent transactions. Here are the ten reasons you must choose investing with Bitcoin over other cryptocurrencies;
Table of Contents
First-Mover Advantage
Bitcoin was the pioneering effort in the field of digital currencies. Due to its pioneering status, it has earned lasting acclaim and acceptance. Bitcoin was the first digital currency, so it naturally attracted supporters among techies and regular people alike. Being an early user of a technology is correlated with greater success in the long run.
Bitcoin’s first mover advantage is a major factor in it becoming the digital gold standard. Since Bitcoin is the most well-known kind of cryptocurrency, the term “Bitcoin” has come to mean “cryptocurrency” in general. Investors like it because of its long history and widespread recognition.
Liquidity
A highly liquid asset is a must-have for any investor. Since it is accepted on such a large number of exchanges and markets, it can be bought, sold, and traded with relative ease. With the ability to enter and exit positions rapidly without being overly exposed to price fluctuations, investors may reap the benefits of the market’s high liquidity.
While the price fluctuations of bitcoin are quite stable as it is visible when you convert BTC to USD, you can determine the amount of BTC units you wish to trade in USD. Proof of how far along in its market development Bitcoin already is can be found in how easy it is to trade. Due to its high market cap and widespread acceptance, Bitcoin is a more practical option for investors that place a premium on liquidity than some of the newer or lesser-known cryptocurrencies.
Institutional Adoption
Bitcoin’s utility has expanded beyond its original intent, piquing the interest of traditional financial institutions. Organizations, investment firms, and even nations all recognize its importance as a safe haven for currency and a means of diversifying holdings. This institutional interest lends legitimacy to Bitcoin and could lead to price stability.
The involvement of large financial institutions has helped establish Bitcoin as a respectable asset class. Cryptocurrency values are less likely to see the huge fluctuations they have in the past if they have this kind of backing from institutions.
Brand Recognition and Trust
New and seasoned investors alike may find comfort in Bitcoin’s familiarity and reputation in a volatile and unpredictable market. Because it was the first cryptocurrency ever created, Bitcoin is seen as a reliable and secure investment with a recognized solid foundation. As the cryptocurrency sector is still relatively uncharted, this element of trust is essential for investors. Despite having achieved brand awareness, trust must not be overlooked.
Decentralization
There is no central authority that issues or controls Bitcoin like there is with traditional fiat currencies. Bitcoin’s blockchain technology ensures that all transactions are private and untraceable. Benefits of decentralization include improved security, transparency, and resistance to manipulation.
Conventional banking systems and even some other cryptocurrencies face the possibility of government interference, but Bitcoin’s decentralized design safeguards its users. Investors searching for a change of pace from conventional systems will appreciate the system’s autonomy and safety.
Limited Supply
There will never be more than 21 million Bitcoins in circulation, as that is by design. Consider the opposite, the ability of governments to produce new fiat currency at will, and the concept of scarcity. Some people are considering Bitcoin as a hedge against currency devaluation and inflation because of this flaw. One of Bitcoin’s appeals is the currency’s adherence to scarcity, a basic idea in economics. Investors and traders are increasingly attracted to Bitcoin as a safe haven from the fluctuating value of traditional currencies.
Market Dominance
The total market capitalization of all cryptocurrencies remains significantly smaller than that of Bitcoin. Despite the rise of other cryptocurrencies (altcoins) that provide different characteristics than Bitcoin, the latter continues to dominate the market. In times of market instability, when many investors are seeking refuge in bonds and equities, such a strong position can be a calming force.
That Bitcoin has been able to maintain its dominance in the market despite economic fluctuations is evidence of both its popularity and its resilience. As a result, this reliability can be appealing to cautious investors who are considering entering the highly volatile cryptocurrency industry.
Proven Security
Bitcoin’s security has been validated several times during its lengthy lifespan. As a result of withstanding several attacks and other challenges, blockchain technology has shown to be reliable and safe. The huge stakes in the cryptocurrency market make this proven track record of safe transfers all the more comforting to potential investors. Even if they explore with new technologies, lesser-known alternatives may not be able to offer the same level of reliability as Bitcoin’s tried-and-true security protocols and blockchain technology.
Historical Performance
The historical price of Bitcoin demonstrates its potential. Despite its notoriously unpredictable price, Bitcoin’s worth has grown substantially over the years. While it’s impossible to know for sure if the past is any indication of the future, Bitcoin’s track record suggests it has the potential to provide large profits for investors.
Those who are willing to ride out the currency’s volatility might potentially reap big rewards, as evidenced by Bitcoin’s historical performance. This precedent may sway potential investors who are debating whether or not to put money into this digital asset.
Diversity
Bitcoin and other cryptocurrencies have historically low price correlations with the US stock market, so including them in your portfolio is a good way to spread your risk. Your investment portfolio would benefit from including cryptocurrency purchases if you anticipate widespread adoption of this technology in the near future. Take care to have a well-thought-out investing thesis explaining why each cryptocurrency you put money into will last. If you do your homework and educate yourself as much as possible about cryptocurrency investing, you should be able to handle the risk as part of a diversified portfolio.
Endnote
Everyone wants a return on their investment, hence greed is the primary driver of the bitcoin market. Investments in cryptocurrencies may yield larger returns than stock investments. Due to the extreme volatility of cryptocurrencies, even a single trade can result in massive gains. However, you must tread cautiously so that you won’t lose your investment capital by binge trading.
