Last Updated on December 8, 2019 by WebsiteDesigner.sg
Bitcoin is the world’s largest cryptocurrency by market value and trading volume. It was started back in 2008 and after 11 years its price and universal appeal has skyrocketed and it has in many ways become a mainstream alternative currency that people can rely on.
Bitcoin provides an alternative financial portfolio and capability that is not offered by anything else currently operating in the world. It offers cheap, secure P2P transactions that are not controlled or manipulated in any way because of the foolproof decentralized consensus system at the back of it. So, security, surety, borderless nature and increasing potential of mainstream application. These are the biggest reasons why Bitcoin should always be part of a person’s financial portfolio.
But there is always considerable risk in buying Bitcoin as it is a volatile asset. Some people bought it at its peak and its current worth is around 45% of the peak figure. It means that many investors have incurred losses while investing in the digital asset.
While most investors agree that Bitcoin can be a valuable asset, they also promote the idea of buying when its low. Despite the recent price jump from $7000 to $9600 and subsequent small drop to $8800, Bitcoin is still showing mixed signals.
But, if you look at the next few months, all market and external indicators show that the cryptocurrency is in for a major price increase. They include increasing Chinese acceptability, Bitcoin block reward halving in May 2020 and ability to help the economically struggling areas around the world hit by hyperinflation.
First things first. China has for long identified itself as anti-crypto and there is a blanket ban on cryptocurrencies around the country except for special territories like Hong Kong where exchanges like Binance and Bitfinex are based. But now, recently the Chinese government has rejected a ban on cryptocurrency mining in the country despite the presence of the blanket ban on the use of the cryptocurrency.
This clearly shows that even China is opening up to the application of Bitcoin and may be ready to fully embrace it in the future even if it is not fully ready to do so right now. More and more Chinese companies are openly embracing blockchain technology, the tech behind Bitcoin and many underground traders are using the cryptocurrency in the country. So, with increased Chinese exposure, more and more traders and merchants will start using the cryptocurrency for international transactions thus making it more mainstream than ever. This will drive its price upwards and even possibly breach the all time high of $20,000 in the future.
Secondly, Bitcoin’s stature is only going to grow because of its application in combating hyperinflation. In countries like Venezuela and Argentina where the inflation figures are sometimes more than 10000% on a yearly basis, holding money is out of the question. It means that the money that people have will be worth less than 1% one year from now. So, instead of saving money, people can save and hoard Bitcoins. Bitcoins are pegged to the US Dollar and since actual dollars are scarce due to the economic sanctions and bankrupt government, people can buy Bitcoin and thus save themselves from this crippling inflation.
Finally, Bitcoin block reward halving is set to take place in May 2020. It means that the process of creating new Bitcoins will decrease by half in five months’ time. This will create scarcity for the digital asset and thus prices are expected to increase a lot in the build up to the halving process. The halving process is carried out every four years and this time the anticipation is such that the cryptocurrency’s demand will outweigh the supply dramatically thus very likely causing a significant price jump. So, if there is still any other correct time to buy Bitcoin, it is now.