Obvious reasons to go for cryptocurrency in 2020
Now all over the world, there is an active process of digitization of the economy — document management, digital transactions, the introduction of new payment systems, digital money. Many states already legalized the system of cryptocurrencies, for example, Singapore, China, the UK, Japan.
Bitcoin and some other popular cryptocurrencies have some unique properties. It is an alternative way to preserve the value of your earnings with maximum protection of the ownership rights of the asset. Bitcoin is often compared to gold. It also has a limited supply with a complicated process of its mining. That is, you can’t turn on a virtual printing press and “mint” an unlimited number of coins, thereby devaluing those already issued.
As a rule, an average investor has several types of assets in his or her portfolio, one of which is cryptocurrency. So, why you should go for Bitcoin or any other cryptocurrency in 2020?
Bitcoin is the first decentralized cryptocurrency. It is considered to be absolutely anonymous, secure, and available to every consumer. The digital currency is based on Blockchain technology, which is almost impossible to hack, as each transaction is based on the previous one and is recorded in a register. This means that you have to hack the entire chain to make a change in a single block. The cost of one-step control of the system’s computing power to penetrate the chain and tamper with ownership significantly exceeds the likely return on the hack. Consequently, Bitcoin is secure from fraud and financial scams, which increases the level of trust of cryptocurrency holders and confirms the security of the digital currency. It does not protect holders from hacking the wallets themselves, though. If an attacker gets the key to your wallet (or you lose it yourself), you lose your Bitcoins. One of the safest multicurrency wallets is a non-custodian Sapien wallet.
In addition to the technological innovation that underpins bitcoin, the large-scale “habitat” should be taken into account. The number of new bitcoin wallet users for the previous year increased by 6 million people, and this figure continues to grow. This means that the demand for this cryptocurrency will grow, which acts as a kind of guarantor of its stability.
Financial institutions also find Bitcoin attractive. Cryptocurrencies are present in asset management companies, venture capital funds, and large banks that are ready at any time to make transactions for the exchange of assets. The growing number of transactions (deposits, withdrawals, exchanges) plays into the hands of brokers, exchanges, electronic wallets, and exchange services, which get their benefit in the form of commissions. Due to high demand, they can speculate, which stimulates even higher cryptocurrency value.
Major market players are taking cryptocurrencies more and more seriously. Bitcoin is recognized as the fastest, broadest, and most stable digital asset capable of providing global payments. Bitcoin assets can even be used as collateral. Private lenders say they are willing to accept cryptocurrency on a par with classic assets (gold and real estate). They believe that it is an ideal form of collateral for a loan — bitcoins are highly liquid and do not require additional storage costs.
In the countries of Europe and Asia (Germany, Austria, South Korea, etc.), Bitcoin and other cryptocurrencies are equated to fiat currencies and are considered a convenient way to pay for all kinds of goods or services. The largest retail chain Alza accepts bitcoins as a legitimate alternative for current payments. ATMs for Bitcoin cashing are installed in Prague, Bratislava, the U.S., and other countries. Legislative amendments are regularly made resulting in Bitcoin and other cryptocurrencies becoming legalized.
Over the past year, investors have received incredible returns of over 700% from their investments in Bitcoin and other cryptocurrencies. The extremely high volatility combined with great potential attracts not only long-term investors but also traders who trade on short-term timeframes. At the same time, professional market players try to balance the investment portfolio to avoid losses at the moments of serious correctional surges.
Broker Mike Maloney, a founder of the precious metals investment fund, urged investors to use Bitcoin as a must-have investment in their portfolios in case of financial market volatility and unforeseen economic downturns.
“Gold as a tool to hedge market volatility is becoming less and less reliable. Bitcoin is taking the lead. I believe that buying cryptocurrencies today is the most effective way to protect against shocks to the global financial system” — Mike Maloney.
Investors around the world have begun to transfer some of their “gold reserves” into cryptocurrency. After all, thanks to its decentralization, Bitcoin does not depend on external events — it is not affected by economic, political, or social “shocks.” It has already demonstrated in practice that it is one of the safest assets and can protect even solid investments.
Bitcoin is developing and growing at an incredible rate, and with it, the number of cryptocurrency exchanges is increasing. Trading platforms are processing more than $200 million in trades every day, which exceeds the figures for some classical currencies. Bitcoin has overtaken the Japanese yen in terms of trading volume and has become the biggest player, taking the lion’s share of the global exchange market.
The main value and reason for the high demand for bitcoin is the limited issue — 21 million units. About 16 million of them are in circulation, and the rest will be issued by 2050. In other words, demand exceeds supply many times over, which creates a certain level of scarcity, making this cryptocurrency highly liquid and investments in it profitable.
Throughout its history, there have only been a few cases when the cryptocurrency rate fell sharply and for no reason. However, the multiple subsequent rises significantly outweighed the fall. Bitcoin Cash, which entered the market on 01.08.2017, showed even better results than bitcoin — its value tripled already on the second day of trading. Undoubtedly, Bitcoin will continue to grow in the future, which becomes a guarantee of return on investment.
The cryptocurrency market presents many opportunities to make money and you should not miss them. There are currently at least 1000 types of cryptocurrencies. Will one of them achieve the same high popularity as bitcoin? It is quite difficult to say unequivocally — some factors need to be taken into account. The value directly depends on the demand, the volume of transactions, and the usability of the chosen coin (versatility). Despite this, every investor needs a safe, convenient, and secure cryptocurrency wallet. Sapien Wallet is considered the best in this regard — beta tests have already begun.