Bitcoin has taken many investors captive due to its incredible long -term returns, but its instability has placed some investors on the edge. The major cryptocurrency regularly sees sharp ups and downs that can push it up or down to 10% in a few days.
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Not every investor wants to deal with that level of uncertainty, but if you compare with popular benchmarks such as S&P500 and Nasdaq Composite, you cannot question the results. Cryptocurrency may also recently reconstruct $ 100,000 per coin and may be higher.
If you are at the fence with bitcoin, there are some reasons to consider it on start.
Long -term returns of bitcoin are impressive
Although bitcoin does not produce revenue and net income increase like publicly trading corporations, returns are undisputed. Bitcoin has increased by 68% in the last one year and has increased by 978% in the last five years.
S&P 500 and Nasdaq Composite has not doubled even in the last five years. Bitcoin has proved to be a viable way to multiply your money. While the results are not guaranteed, many investors use long -term returns to speed up speed and investors’ hunger. Despite the story around uncertainty, Bitcoin has hit a long mark.
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Big players are joining
Last year there was a large for bitcoin. Spot Bitcoin ETFS began trading on January 11, 2024, and several financial institutions ran to offer their offer. Blackrock, fidelity, Ark Invest, Vanek, and Grayscale are some firms that launched Bitcoin ETF.
Each of those ETFs puts more money in bitcoin, and it puts pressure upwards at the price. Bitcoin ETF has made digital currency more accessible to everyday investors, and this trend can highlight bitcoin in the long run.
Bitcoin strategic stock
President Donald Trump established the Bitcoin Strategic Reserve with an executive order. This can promote the demand for strategic reserve crypto and can get more profit for investors.
While bitcoin strategy is relatively old news, it can ripple into individual states. For example, Erizona recently became the second American state of Bitcoin Strategic Reserve. This is possible for more states to follow the trend, and each commitment requires more bitcoin purchases.
Bitcoin is a inflation hedge
Bitcoin also acts as a valuable inflation hedge that gives it a higher value because central banks print more money. Only 21 million bitcoins are available, and it is impossible for anyone to increase supply. This is the beauty of decentralized blockchain of bitcoin.
Investors who want a historically successful property that can reduce the risk of inflation may want to keep an eye on this alternative property closely.
The basis of a universal currency is attractive
Universal currencies give more control to people and allow them to avoid foreign exchange charges. If an American goes to the United Kingdom, they will have to pay the fees to convert their US dollars into a British pound. Then, if you travel to any country of the European Union, you have to convert some of your US dollars or the remaining British pounds into euro.
It is a cumbersome and expensive process for regular passengers that continuously shop. Some credit cards also have foreign transactions fees that increase costs for paperless transactions.
Bitcoin avoids fees when it is used for purchase. The long -term base of cryptocurrency is attractive to those who want to save money on foreign exchange fees. Right now, bitcoin is still in its early innings compared to fiat currencies. At some point, the annual growth rate of bitcoin will slow down. However, the nature of bitcoin as a universal currency should promote its appeal in the coming years.
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This article originally appeared on gobankingrates.com: 5 reasons you need at least 1 bitcoin
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