Is Bitcoin a Profitable Investment?

Landscape can be overwhelming and even daunting for new investors who explore Bitcoin for the first time. The outlook for Bitcoin varies wildly from optimistic hardcore zealots to those who reject it as a futile Ponzi scheme, on the other. Here are five reasons for this if you ask yourself, ‘I should invest in bitcoin.’ Here you can get to know everything about

Acceleration in Adoption

Bitcoin’s global acceptance is speeding up. For instance, the number of Blockchain’s common wallet users increased steadily throughout 2020 and accelerated steeply since last November. However, one aspect of the story is wallet numbers. Retail investors will happily leave their Bitcoin with a guardian like Coinbase, Squareâ s Cash App, or PayPal as many people keep BTC in their wallets as possible. As the Bitcoin bull market keeps on heating, both retail and institutional investors are on-ramped to pursue the momentum. Many holders of other coins and tokens also swap crypto-monetary funds to get Bitcoin back at the highest market rate for their altcoins. This is when aggregators like Swapzone come into play for instant crypto exchange.

Ideal Value

The 2009 global financial crisis gave the birth of Bitcoin. Bitcoin was deployed in the wild under the circumstances of bank collapses, government rescue, and quantitative easing, where everybody, except tiny, but increasing idealists, ignored it. A decade after, even with more rescues, historically low-interest rates, and accelerated quantitative easing, we see a new financial crisis. Understanding the unique value proposal of Bitcoin and where Bitcoin is in this macro setting is growing among individuals and companies. Paul Tudor Jones, leading macro investor, told him in 2020 that Bitcoin reminded him of the role played by gold in the 1970s. 

Money printing has found a place in asset markets – both of which have driven stocks, bonds, and property prices to extreme levels. A modest reassignment of even 1 percent from other asset classes to Bitcoin is more than the entire market cap for Bitcoin. Given the hardcoded limit of 21 million coins on the Bitcoin protocol, a specific digital scarcity is created. If demand increases, supply cannot be increased. The supply can only be supplied by current Bitcoin holders who are prepared to sell.

Stock to Flow

A “stock to flow’ investment principle can be employed to measure a good’s scarcity. Stock reflects the overall amount of new supply available each year and flows. Bitcoin is open-source software with a set delivery schedule. After the third halving of Bitcoin in May 2020, Bitcoin’s existing S2F is 56, approximately the same as gold. He argues that the growing scarcity of Bitcoin would add value. Since then, PlanB has revised the original model to a cross-asset model. In terms of a Bitcoin price estimate, this model states that if the model keeps up, the Bitcoin price could hit US$288K in this cycle.

Always Hits New Best Value

Finally, it never hurts to look at historical pricing data for someone who asks ‘I should buy Bitcoin’ In the last ten years, Bitcoin saw several peaks and troughs and over 383 reports in the mainstream media of “missing.” 

In mid-2011, the Bitcoin price reached $30 at Mt.Gox, which was then the most common exchange. After a currency hack, the price fell to just $2 by November 2011 before recovery in 2012. The price crashed. In April 2013, Bitcoin reached the $260 mark briefly and was hit by a DDoS attack over 50 percent in the next few hours as Mt.Gox could not accommodate the rise of trade volumes. Almost seven months have passed before Bitcoin exceeds its latest height after a decline in investor interest in the Bitcoin trade ecosystem.

In late 2013, Bitcoin first struck the symbolic mark of $1,000, but in two years, the price fell to a low of $175. Two years later, in early 2017, Bitcoin once again reached the $1,000 mark and exceeded its former all-time height to reach its popular all-time height of $20,000 a coin in December 2017. Historical pricing data showed that Bitcoin was ready to once again surpass the latest all-time high in December before setting a new constant high at nearly 61,000 in March. If the flow stock is next door or not, Bitcoin may already show sufficient interest to support a slow and steady price rise. Meanwhile, quantitative easing and rising levels of government debt would help inflate asset prices and decline currency. Bitcoin can also prove itself the greatest hedge as gold is already stalling.


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