There are lots of investment instruments and opportunities vying to take space in our investment portfolio. Which makes the decision on what could be the safest and most profitable investment difficult. Factors like, the safety of the principal, government policies, interest rates, cost of investment procedure, trust in the issuer of investment instrument and more, are all taken into consideration. However, there are just a few investments that meet most of these factors and Bitcoin tops the list.
In the past decade, there has been a lot of ruffling in the cryptocurrency sphere. Yet Bitcoin has remained strong and promising as ever. In this article, we share with you five (5) reasons why Bitcoin should be in your investment portfolio especially if you are a long-term oriented investor. Let’s explore why Bitcoin should be an asset to consider for your investment portfolio in 2020.
In this article, we will answer such questions as:
- How much will Bitcoin be worth in 2020?
- What is the Bitcoin halving?
- Why is Bitcoin price going up?
- Is Bitcoin a good investment?
- What is the best investment?
1. Bitcoin vs traditional financial assets
With a market capitalisation of $188.9 billion USD ($282.6 billion AUD). As of 14 Feb 2020, Bitcoin has been one of the best performing investments in 2019. Outperforming other mainstream investments such as stocks and gold.
It is important to note that Bitcoin’s pricing remains volatile compared to other traditional financial assets. This is evident by the significantly high standard deviation of daily returns %. The volatility should be taken into account when structuring your investment portfolio appropriately.
2. Bitcoin halving in May 2020
You may heard the term “Bitcoin halving” or “Bitcoin halvening” being thrown around lately. So what is the Bitcoin halving?
On May 20th 2020, Bitcoin will experience its third halving event. 50% less Bitcoins will be generated every 10 minutes, and this could lead to a substantial spike in prices.
A bitcoin halving aka halvening, is where the reward for mining new blocks is halved. Essentially the reward that Bitcoin miners receive is 50% less than before. Bitcoin halvings are scheduled to occur once every 210,000 blocks or roughly every four years, until the maximum supply of 21 million Bitcoins.
Bitcoin halvings are important events for the cryptocurrency industry and Bitcoin traders because it shrinks the number of new Bitcoins being created by the blockchain. So this leads to the question of why is Bitcoin price going up? This limits the supply of new coins entering the market, thus significantly changing the supply / demand curve. It could also lead to an upwards swing in prices even if demand stays the same, let alone increases. This has occurred in the two prior halving events, causing bitcoin’s price to rise rapidly. However, the conditions surrounding each halving are different and demand for bitcoin can vary wildly.
Consider the two previous halving events boosted Bitcoins price by at least 10 times. The last halving occurred in July 2016, and the price increased steadily from $600 – $700 USD to nearly $20,000 USD. Bitcoin had grown over 20x from its price before the second halving and over 1,000x from its price before the first halving. So how much will Bitcoin be worth in 2020? Nobody knows for sure, but those are some significantly positive arguments on why it could potentially increase.
3. Worldwide adoption of Bitcoin
Bitcoin and Blockchain technology adoption is similar to the early days of the internet where some people were skeptical about it, some others were quick adopting it and the engineers kept working to improve the technology. There is virtually no nation that has not heard of the invention of cryptocurrency. Most developed nations including countries in Africa, South East Asia, and South America are already making transactions using Bitcoin and ditching the fiat currency. Nations like India are incorporating the blockchain technology into their system of operations at their highest level of government.
All these trends point only to the fact that though the adoption worldwide may be slow, there is a level of certainty that in another decade blockchain will be incorporated locally within nations. Now might be the best time to get in and take a long position by investing in Bitcoin before the worldwide Bitcoin explosion.
4. Ease of Investment
In investment banking, it is a known statistical fact the most used and most popular financial investment instruments are those whose entry requirements are easy. Basically, both entry and exit of the investment instrument must be intuitive to the average investor. Bitcoin could not get any easier to enter. To invest in Bitcoin all you need is a smart device with internet, your investment capital and a means of identification. That’s as simple as it gets.
If you are looking for an entry to the Bitcoin market, you might be interested in Elbaite. Elbaite is Australia’s safest Bitcoin exchange designed to cater for the security needs of high net-worth Australian traders.
5. Blockchain technology is here to stay
An intelligent investor is always looking to make sense of what the future holds and take advantage before it comes. What makes Blockchain technology stand out is its ability to permeate any economic sphere or sector. Talk about agriculture, maritime, banking, business development, data storage and so on. Blockchain technology can be infused into them all for a more effective and efficient process of operation. The upside for investors is that everywhere Blockchain technology goes, Bitcoin automatically follows!
Conclusion
Investing long term is the best way to invest for you and your family’s future, and its essential that any portfolio has the right mixture risk / reward weighting that is structured to your financial situation. Depending on your financial situation, Bitcoin could be an asset that even if its a small portion of your portfolio, could make a big difference in the future.
Elbaite is the cryptocurrency exchange designed for Australian traders seeking safety, security and simplicity. Make an account today to start your Bitcoin investment journey!
Disclaimer: The information on this website is purely for information. Elbaite is not a financial adviser, and nothing stated here is to be taken as financial advice. You should seek independent legal, financial, taxation or other advice relevant to your financial situation before making any investment decisions.
Informative article. Thanks