If you have been following Bitcoin, you know for the past month, it has continually broken records and was able to touch $41,000 last Friday. Many people see the same craze a few years ago, when the crypto king swelled to nearly $20,000, led by a massive crash in value, bringing a start to what many called the Crypto Winter.
However, there’s never been a better time to invest in Bitcoin.
Don’t Think Fiat, Think BTC
Traditional money, fiat, is subject to inflation. That means the money you hold today is going to have less purchasing power tomorrow. Bitcoin, on the other hand, is hardcoded to have limited coins (21 million, to be exact). This means the digital coin cannot lose power, only increase as new coins are limited in availability against the rising demand.
This results in Bitcoin holders hedging against inflation. Investing in Bitcoin right now will lead to protecting your wealth as fiat devalues. This is very prominent with the effects of COVID-19, as governments around the world have slashed interest rates and are pumping newly minted money in markets without any asset backing. Decentralized Finance is another aspect, where you can loan your saved Bitcoin, earning interest that is far higher than any government, bank or investor will offer for your Dollars.
What Long Term Loss?
Yes, the argument of Bitcoin ballooning and facing an imminent crash as it is overbought is strong. However, let’s realize one thing. If you are going to invest in Bitcoin, it is unlikely you will cash it out in the coming months. Price volatility and slumps will have little to low effect on your long term investment.
Sure, Bitcoin crashed after its 2017 performance, but today, it has not only regained that loss but nearly doubled in value three years later. Five years ago, it was valued at around $350. Even after a massive crash, it will be still worth a lot. You will not find another investment asset or strategy that gives that level of profits in the long run.
And yes, another crash might come tomorrow, eroding your investment value- or it might not come at all. The fact is that Bitcoin has outperformed even gold on year to year basis and it will do so in the future. Even if you invest in today’s high price, Bitcoin will not disappoint you a few years down the road.