Investing in Bitcoin — Has That Ship Sailed?

The world of cryptocurrency is rapidly growing. Some people choose to invest in popular, ethereum-based digital assets like non-fungible tokens (NFTs), while others buy meme coins like dogecoin (DOGE) for the entertainment factor.

No matter the level of your crypto knowledge, you’ve likely heard of bitcoin (BTC), the most well-known cryptocurrency to date. The highly regarded crypto is considered the oldest surviving digital asset since its introduction in 2008.

Almost a decade and a half later, is it still worth investing in bitcoin? Could bitcoin investments bolster or diversify your portfolio? What does the future hold for crypto? 

Let’s look at bitcoin’s recent market performance and whether or not it’s too late for you to take advantage of bitcoin investments.

Understanding the Current State of Bitcoin

Bitcoin is subject to wild price fluctuations, just like virtually every cryptocurrency. Bitcoin’s price is volatile, making it challenging for investors and experts alike to measure or agree on its true value. As a result, forecasting future changes can be difficult.

Bitcoin’s value exceeded $65,000 in 2021, an all-time high for the original cryptocurrency. Two reasons for this price jump was the launch of bitcoin’s ETF (exchange-traded fund). In the same year, bitcoin’s value rose after Elon Musk’s company, Tesla, purchased a whopping $1.5 billion worth of bitcoin.

Overall, bitcoin performed well in the first half of 2021. However, a stock market decline in late 2021 caused its price to drop and continue falling through the beginning of this year. It’s impossible to know if it will recover, as many factors contribute to its value. 

According to The Motley Fool, a major shift in the crypto community holds promise for bitcoin and its future performance. Additionally, a recent deal between Coinbase and BlackRock could cause bitcoin’s price to skyrocket.

Reasons to Invest in Bitcoin

Would it be worth it if you joined a bitcoin exchange platform today and began investing in the cryptocurrency?

Here are some of the reasons why you should consider investing in bitcoin right now:

• It’s a widely established currency, with millions of people possessing bitcoin.
• It’s regarded as the “currency of the future.”
• El Salvador and the Central African Republic have already made bitcoin legal tender.
• Other countries, including Panama and Cuba, have shown signs of adopting bitcoin.
• Bitcoin is still relatively new, and some experts believe it hasn’t reached its full potential yet.
• It has a finite supply of 21 million, which means it could jump in value.
• The blockchain system powering bitcoin is limitless, and the cryptocurrency is resistant to inflation.

Various experts have weighed in on whether or not investing in bitcoin in 2022 is a wise decision. For example, an article from NASDAQ discusses future bitcoin predictions from reliable sources like Forbes, the Changelly blog, Forkast and Ian Belina, the founder of crypto market research firm Token Metrics.

Risks of Investing in Bitcoin

All financial investments carry risk — bitcoin is no exception to this well-known rule. However, if you’re interested in investing in bitcoin, you must be aware of the dangers involved. 

Consider these risks to help you determine if bitcoin investments are right for you:

• Bitcoin is subject to extreme volatility. A single tweet or news story could cause its value to plummet.
• Crypto platforms and crypto wallets, which are both digital, are often targeted by hackers and other cybercriminals.
• Bitcoin’s decentralized nature and the lack of government regulation make resolving transactional or legal issues difficult and sometimes impossible.
• A lack of knowledge about crypto or trading practices could make you more susceptible to scams, which are on the rise.
• Cryptocurrencies are capital assets, and any mined crypto is subject to Internal Revenue Service (IRS) regulations. These laws may be confusing for new investors.

Knowing these risks and learning more about crypto investments could help you avoid dangers and determine your appetite for risk.

Is It Too Late to Invest in Bitcoin?

No, it’s not too late to invest in bitcoin. Some crypto enthusiasts suggest its persistence as a popular, widely accepted digital currency is the main reason investments are still viable. 

Other possible reasons why it’s not too late to make bitcoin investments include:

• Bitcoin still has room to grow and has trended upward in the past.
• More people and companies are investing in bitcoin daily.
• Some businesses are now accepting bitcoin as a form of payment.
• Blockchain, bitcoin’s underlying technology, is constantly evolving and improving.
• Government regulations around bitcoin and other crypto investments are emerging.

Ultimately, you need to decide if bitcoin investments are right for you.

The Final Verdict on Investing in Bitcoin

Cryptocurrencies have yet to emerge as a mainstream form of payment, so it’s unclear if bitcoin investments are considered sound at this time. However, the ship has not sailed — you still have time.

If you believe in the promise of crypto, you may want to consider starting with small bitcoin investments. Avoid spending more than you can afford to lose, especially if you decide to take your chances and invest in bitcoin this year.