The year 2021 has been a record year for cryptocurrencies across the board. With the arrival of meme coins which have made instant millionaires and altcoins gaining traction, this has been the year that many have been waiting for. Despite the success of other cryptocurrencies, what really stands out is Bitcoin dominance. This is the original crypto and the one that everyone is seeking to own.
In years gone by, Bitcoin was seen as a short term investment. People would buy and then sell on very quickly as and when the price went up. The price would always go the right way and it was rare to have to wait any period of time. Some went with a quick turnaround as they feared the volatility that was associated with Bitcoin, but things are starting to change.
The volatility of the past
Buying and quickly selling Bitcoin was always understandable. The currency was so volatile that its value could swing dramatically in the space of just 24 hours. This saw investors exiting the second that they saw a price rise. They wanted to cash in while they could rather than holding out for further increases. The truth is, even back then, if people had held their nerve they would have profited more by holding on – overall Bitcoin is always up in value!
Those wild swings have subsided. Yes, Bitcoin will experience ups and downs just like stocks and shares do, but nothing like was experienced in the early days. This means that it now makes sense to hold onto your investment for the longer term and let it achieve its true potential rather than making a quick buck (even if that quick buck is phenomenal in itself!)
The fear of inflation
The world has experienced some tough times of late and there are bound to be knock-on effects that affect world economies. Inflation is already an issue in both the US and the UK and there are few signs that this is going away any time soon. When this happens, investors seek a safe haven. They want an investment that can’t be affected by inflation. That investment is Bitcoin.
By its very nature, Bitcoin is impervious to inflation. There are 21 million Bitcoins in existence and there can only ever be 21 million Bitcoins in existence. This means that it will always be limited, and therefore an in-demand asset. This makes it the perfect long-term investment.
Entering the mainstream
What Bitcoin has achieved over the course of 12 years is simply amazing. At its conception, the crypto was mocked. As it slowly started to show its worth, people then began to question its security and then if it could ever have a practical use. It worked its way through these issues and it is now part of the mainstream.
What has helped Bitcoin on this journey is the fact that big names have recognised its worth. Companies such as Tesla and Microsoft have invested heavily in the crypto as well as private hedge fund managers. The acceptance of Bitcoin by such organisations shows that Bitcoin is a safe investment for the long term.
The value of the intangible
As the world’s financial systems face strain there will be traditional investors seeking the security of tangible assets. Gold tends to be the go-to investment when waters appear a little choppy. The thing is gold can always be mined and that means it is not where the safe money should be going.
Bitcoin’s attraction is that it is intangible. The value will never be affected by increased demand in the same way that gold is. Long-term this means that Bitcoin is the safest investment opportunity that exists right now.