Bitcoin, often called the king of cryptocurrency, is still making its upwards climb and many investors have their eyes not only on Bitcoin, but several other coins such as Dogecoin, Litecoin, Ethereum, Ripple, and numerous others. Cryptocurrency trading and investing are known to pose significant risks, however, despite this, there are numerous reasons why you should consider investing in 2021.
Blockchain technology shows a substantial amount of potential to establish itself as technology of future generations. There are many people who believe that it is the greatest invention in human history that will inevitably reshape the global economy. Due to the high level of security and adaptability, blockchain has been gaining mainstream adoption rapidly around the globe.
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Cryptocurrencies as a mode of payment
One of the main goals of cryptocurrencies such as Bitcoin and Litecoin, amidst others, is to enable borderless transactions between people around the world without the need for a third party. These transactions also have high levels of privacy and the properties attributable to cryptocurrencies make them perfect for daily transactions.
Increase in value
Where financial assets are concerned, there is nothing that has ever risen as fast and as much as Bitcoin has. It has shown meteoric rises in value over the past decade, without any sign of stopping. Whereas conventional currencies depreciate, cryptocurrencies are set to increase in value and to become the ideal hedge against inflation.
Performance as an asset class
In the past two years, Bitcoin has gained more than 450% in returns. Within the same time, it has outperformed returns on investments in other major financial asset classes. There are many analysts who believe that Bitcoin can set a new parabolic growth cycle for the next five years. Bitcoin is also capable of increasing in value by more than 50 times, boosting its market capitalisation to even higher levels than that which have been seen in the past two years.
According to many analysts, the value of cryptocurrencies is currently underestimated and often not yet fully realised. Trading volumes in cryptocurrencies have not surpassed $230 billion when compared to other assets such as currencies, gold, and stocks. However, it is predicted that the cryptocurrency market could reach $5 trillion by the year 2024.
Support from financial giants and government agencies
Despite many price dips in Bitcoin, there have been many financial institutions that have expressed their interest in the cryptocurrencies as well as its market. Banks will eventually become involved in the cryptocurrency space as they see a tremendous opportunity for significant gains. Government agencies around the world are also attempting to adopt cryptocurrencies and to start implementing block technology. One example of this is the Chinese government which has allowed for blockchain transactions to be used as proof in a court of law, another is that of Japan adopting cryptocurrencies as a legal mode of digital payment.
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