Many individuals that have discovered bitcoin are still hesitant to invest in the digital currency, especially since the value has already increased so much and many believe that it won’t go much further. However, the likely scenario is that the value of bitcoin will continue to increase.
In this article, you will find four reasons why you should still consider investing in bitcoin.
1. Bitcoin’s Comparatively Low Transaction Costs
The average historic fee for a bitcoin transaction is $1. You need to compare that to the 3%+ transaction fee for using PayPal or Stripe. For this reason, bitcoin adoption is growing among online retailers who can save on fees as well as individuals who send money abroad to friends and family member. Many freelancers have also started accepting bitcoin because they don’t have to pay as much of a cut as they would through PayPal.
2. Central Banks Can’t Devalue Your Investment
The Federal Reserve and European Central Bank are constantly manipulating the value of their fiat currencies. Their monetary easing policies can wreak havoc on traditional investments. Since 2010, the Federal Reserve has kept short-term treasury interest rates near 0%. Their market manipulations have kept the stock market elevated, but may be positioning it for a massive drop in the future.
Bitcoin, however, is not regulated nor influenced by a central bank. Also, the supply of bitcoin is fixed, which means that its value is primarily determined by demand. In other words, you don’t have to worry about new bitcoins being printed that then drive down the value of the currency as it is often the case with fiat currency.
3. Value Will Appreciate as More Merchants Accept it
When bitcoin first hit the market, it was seen as a novelty that would never catch on. Today, it is going mainstream faster than even the most optimistic bitcoin fan would have expected.
eBay published a list of over 100 companies that have started taking bitcoin, including major brand names like CheapAir, Helen’s Pizza and Home Depot. Many more companies have pledged to start accepting bitcoin in the near future.
As the number of brands accepting bitcoin continues to grow, the value of bitcoin will most likely rise. After all, people will be a lot more likely to buy bitcoins if they can use them for many of their common purchases.
4. Bitcoin May Be Undervalued
Many experts believe that bitcoin may be significantly undervalued. Barry Silbert, founder and CEO of Digital Currency Group, compared the value of bitcoin against gold and suggests that the value of the digital currency is likely to appreciate in the future.
“Bitcoin has all the same attributes of gold in that it’s scarce, there’s a finite supply, it’s fungible, it’s highly divisible, it can’t be counterfeit,” Silbert told Forbes. “But it has one real improvement over gold, which is its utility. Gold is good for jewelry and use in some industrial production processes, but as the price increases, it becomes less useful for both those uses, whereas bitcoin, on the other hand, actually becomes more useful. It becomes more useful as a [money transfer] rail and as a ledger [of financial transactions].”
Civic’s Vinny Lingham believes that the price value of bitcoin will hit $3000 by the end of 2017, while Sheba Jafari, Head of Technical Strategy at Goldman Sachs, believes that “there’s potential to extend as far as $3,915. It just might take time to get there.”
Kay Van-Petersen, an analyst at Saxo Bank, suggests that the value of bitcoin could even surpass the $100,000 point in ten years time if bitcoin manages to gain a significant share of the global foreign exchange market.
If you are still on the fence about making an investment in bitcoin you should strongly consider the four reasons mentioned in this article as they will likely be key drivers in the future price appreciation of bitcoin.