BTC remains the largest cryptocurrency in the world, with millions of people around the world holding it in pursuit of above-average returns. Often, the coin has also served as a transactional currency, giving consumers and merchants another choice.
The Bitcoin cryptocurrency isn’t a new one anymore – and could even be viewed as ‘mature’ in terms of the crypto market. While this means that the coin’s price is less volatile, it also means explosive growth is unlikely.
In addition, institutional investors have started to adopt Bitcoin, which has dampened volatility. There are now a variety of crypto index funds using BTC, although an ETF for spot BTC is still a long way off. Although financial institutions’ adoption of Bitcoin does have some positives, it also suggests that its quadruple-digit growth is over.
When everything is taken into account, is it too late to buy Bitcoin? Investing in Bitcoin can be a suitable option for newcomers to digital currencies. Bitcoin in 2022 may be a good investment for three reasons.
Continuation of Institutional Adoption
The Bitcoin currency is already established as a value store, regardless of whether it ever makes progress toward becoming a medium of exchange. However, it’s still far from becoming “digital gold.” Global gold reserves are estimated at $9 trillion, so Bitcoin could rise 10 times and still be worth less than gold.
Bitcoin is an attractive investment to individuals and institutions alike. Because Bitcoin doesn’t closely resemble other financial assets, it can offer diversification benefits. Those who don’t feel comfortable directly owning cryptocurrencies can gain portfolio exposure through Bitcoin-focused financial products.
Real-World Applications
In addition to its current status as a legitimate store of value, Bitcoin could also be used in real-world transactions as a medium of exchange. There is no doubt that Bitcoin is volatile, which is why many skeptics doubt its utility. Nevertheless, it is obvious that it is useful in developing countries.
Statistics show that India received $83 billion in remittances from overseas workers in 2020. Based on World Bank data, an average fee of 5.2% was charged for sending $200 to India. As the dollar figure decreases, the percentage fee increases. Economically, this scenario makes no sense.
It is possible to solve the problem using Bitcoin. The ability of a digital currency to cross international borders almost costlessly could lead to $4.3 billion moving from money-transfer companies into Indian pockets. These people can experience a life-changing economic impact immediately. Getting smartphones into everyone’s hands and providing access to fast internet is certainly necessary. In any case, Bitcoin has the potential to displace high-priced financial intermediaries which are essentially taxes on poorer nations.
The Supply of Bitcoin is Limited
There will always be a finite amount of Bitcoin in existence, so every investor should own some Bitcoin in their portfolio. A total of 21 million Bitcoins can be mined. Against a background in which governments and central banks have the ability to print more money at any time, this inherent inelasticity is an attractive feature.
People around the world who want to protect themselves against declining purchasing power in their own currencies can use Bitcoin because of its capped supply and its global nature. There is no possibility of printing an additional million Bitcoins to ease monetary conditions, unlike with the dollar, euro, or Turkish lira.
You may believe that you need to catch up to the party, since Bitcoin has been a top asset in the financial world over the past few years. However, you need to think again. There is still much to be done for this top cryptocurrency. 2022 may still be an excellent year to include it in a well-diversified portfolio.
