Why invest in Bitcoin? Does Bitcoin make money? Ten reasons to invest in Bitcoin in 2024

•  Why invest in Bitcoin? Key insights for investors
•  10 Reasons to Buy Bitcoin at a Glance
•  Bitcoin Price History Records: Significant Growth Over the Years
•  Bitcoin: The Preferred Decentralized Asset
•  Bitcoin: Explanation of Fixed and Limited Supply
•  Bitcoin: Digital currency used for transactions
•  Bitcoin: The Future Emerging Value Store
•  Bitcoin: A hedge against inflation for investors
•  Bitcoin: Liquidity Market Operation
•  Bitcoin trading discount: Opportunity has arrived
•  Bitcoin Halving Event
•  Bitcoin Price Prediction: Predicting Significant Long-Term Growth Opportunities
•  What is the best time to invest in Bitcoin?
•  Bitcoin Investment Guide, How Much Bitcoin Should I Buy?
•  Bitcoin Overexposure Risk: Avoid Over-Investment
•  Summary

 Why Invest in Bitcoin? Key Insights for Investors

Bitcoin is one of the best-performing assets in recent years. When it was launched in 2009, Bitcoin was almost worthless. Today, the trading price of Bitcoin has exceeded $60,000, peaking at over $70,000 at one point, representing a growth of millions, far surpassing traditional assets such as stocks and real estate. Despite this, many analysts believe that this digital asset still has significant room for growth. Some analysis institutions even believe that Bitcoin could surpass $150,000 this year. So, what makes Bitcoin so valuable? Why are more and more people choosing to invest in Bitcoin? Let’s look at a few key points. Firstly, blockchain is the underlying technology of Bitcoin, which is a significant factor in its investment appeal. Bitcoin’s role as a medium of exchange is unparalleled. Cross-border transactions can be completed in just 10 minutes, usually with low fees of just a few dollars. Bitcoin transactions are transparent, with each transaction recorded on the blockchain ledger, ensuring accountability and security. The decentralized nature of digital assets also increases their appeal. Unlike traditional financial institutions, Bitcoin is not subject to the whims of central banks or governments, providing investors with a hedge against potential economic uncertainties. As the global economy continues to evolve, Bitcoin’s potential as a store of value and medium of exchange is still to be fully realized. Firstly, Bitcoin is a unique store of value. Its supply is limited to 21 million coins, with only 19.7 million currently in circulation, ensuring scarcity and deflationary characteristics. This contrasts sharply with traditional currencies that face inflationary pressures. Additionally, Bitcoin’s supply growth is predictable, with only 3.125 new coins entering the market every 10 minutes, providing stability and transparency for investors. Secondly, the decentralized nature of Bitcoin is a major selling point. Unlike traditional currencies controlled by central banks or governments, Bitcoin is not influenced by any single entity. This autonomy allows Bitcoin to operate freely and without censorship, with transactions conducted directly between users, without the need for third parties. This inclusivity and interference-free freedom are highly attractive to investors. Finally, the price potential of Bitcoin is undeniable. In the recent bullish cycle, Bitcoin has experienced explosive growth, rising from a low of $4,800 to a high of over $72,000, an increase of over 1,300%. Currently, Bitcoin’s trading price is around $65,000, providing investors with an opportunity to enter the market at 10% below the previous peak. This price adjustment offers a compelling entry point for those looking to capitalize on Bitcoin’s long-term potential. However, it is worth noting that Bitcoin remains a risky investment. Its volatile price trends and unregulated nature may expose investors to significant losses. Therefore, conducting thorough research and assessing risk tolerance are crucial before making any decisions regarding Bitcoin.

10 Reasons to Buy Bitcoin at a Glance

Still unsure if Bitcoin is a suitable investment? In the following text, let’s explore 10 convincing reasons to buy Bitcoin now.

 Next, let us introduce each point in detail.

 Bitcoin Price History Records: Significant Growth Over the Years

Since its launch in 2009, the price of Bitcoin has experienced rapid growth, a growth rate that few assets can match. Just three years after its launch, Bitcoin had already reached a high of $250. For early investors, this meant growth of over 250,000%. It would take centuries for the stock market to replicate similar returns. Fast forward to 2017, Bitcoin’s trading price was $1,000. However, by the end of the same year, its price soared to a historic high of $20,000, achieving an astonishing growth of 1,900% in just 12 months. Since then, Bitcoin has continued to soar, reaching a new high of over $73,000. Those who invested in early 2017 are now enjoying over 7,000% returns, proving that Bitcoin has brought unprecedented opportunities for long-term investors. When comparing Bitcoin’s performance to traditional investment avenues, this figure is even more impressive. Over the past five years, the Dow Jones Index, tracking 30 blue-chip stocks, grew by 38%. The Russell 2000 Index, representing 2,000 small-cap stocks, rose by 17%. Even gold, usually considered a safe-haven investment, had a return rate of only 58% during the same period. In stark contrast, Bitcoin’s five-year growth rate reached an astonishing 317%, significantly outperforming all major asset classes.

 Bitcoin: The Preferred Decentralized Asset

Bitcoin stands out as a unique financial instrument in today’s digital age, primarily due to its decentralized nature. At the core of its operation is the fundamental principle of no single point of failure, ensuring its resilience and security. Unlike traditional financial assets such as the US dollar or Euro, which are heavily influenced and controlled by central banks, Bitcoin operates independently without any single entity or organization having overall control. The decentralized structure of Bitcoin contrasts sharply with the centralized nature of traditional financial institutions. For example, central banks determine key economic policies such as interest rates and supply levels, affecting the value and stability of their regulated currencies. However, for Bitcoin, there is no such central authority. Instead, the network is managed by a consensus mechanism, with miners verifying transactions and ensuring the integrity of the blockchain. Bitcoin’s decentralization also provides significant advantages for investors. Unlike traditional bank accounts that are susceptible to government intervention or bank failures, the amount of Bitcoin held in non-custodial wallets is entirely controlled by the owner. Access to these wallets is restricted to the owner’s private keys or passwords, preventing third parties from seizing or freezing Bitcoin funds. This provides investors with a sense of security and autonomy over their wealth. Furthermore, the decentralized nature of Bitcoin is particularly important for those seeking anonymous transactions. Without intermediaries involved, Bitcoin transactions are verified by miners without the need for third-party approval. This ensures privacy and discretion, making Bitcoin the preferred choice for individuals and businesses looking to avoid scrutiny from the traditional financial system. The role of miners in maintaining the decentralized nature of Bitcoin cannot be overstated. Every 10 minutes, miners verify a new Bitcoin transaction block by solving complex mathematical equations to validate the transactions’ authenticity. Miners who successfully verify blocks receive a reward of 3.125 Bitcoins, as well as the transaction fees paid by the sender. This process, known as mining, ensures the network remains secure and decentralized, with miners acting as guardians of the blockchain.

 Bitcoin: Explanation of Fixed and Limited Supply

Next, let’s uncover the mystery of Bitcoin’s limited supply: understanding how much Bitcoin exists. Cryptocurrency enthusiasts often ponder a question: how much Bitcoin is in circulation? Bitcoin is a unique digital asset that has fundamentally changed the financial landscape with its unprecedented attributes. Among them, its fixed and limited supply is a distinguishing feature that sets it apart from traditional currencies and other digital assets. Here’s how Bitcoin achieves this goal and why it’s so important. Firstly, the core of Bitcoin’s supply mechanism is its decentralized nature. Unlike fiat currencies controlled and manipulated by governments and central banks, Bitcoin’s supply is controlled by code, free from external interference. This ensures that Bitcoin’s supply remains predictable and stable, unaffected by political or economic events. The core of Bitcoin’s supply mechanism lies in its block reward system. Every 10 minutes, miners receive a certain amount of Bitcoin as a reward for successfully verifying a block on the blockchain. This process, known as mining, is how new Bitcoin enters circulation. Currently, the block reward is 3.125 BTC, creating 450 new BTC daily and 3,150 BTC weekly. This ensures that new Bitcoin flows into the market continuously and in a controlled manner. However, the beauty of Bitcoin’s supply mechanism lies in its scarcity. Unlike fiat currencies that can be printed indefinitely, Bitcoin has a hard cap of 21 million tokens. Once this limit is reached, no more Bitcoin will be created. This is expected to occur around 2140, marking the end of the era of Bitcoin inflation. Bitcoin’s limited supply is a key factor in its long-term value proposition. As the supply of new Bitcoin decreases over time, its scarcity increases, potentially driving up its price. Similar to other commodities like gold and oil, which are limited in supply and tend to appreciate over time. However, unlike these commodities, Bitcoin’s supply is entirely transparent and verifiable on the blockchain, providing investors with unique certainty and trust. Additionally, Bitcoin’s mining reward halves every 210,000 blocks (approximately every four years). This process, known as halving, reduces the supply of new Bitcoin entering the market. The initial mining reward was 50 BTC, gradually decreasing to 25 BTC, 12.5 BTC, 6.25 BTC, and now 3.125 BTC. The gradual decrease in supply ensures that Bitcoin becomes increasingly scarce over time, further enhancing its potential as a store of value.

 Bitcoin: Digital currency used for transactions

Compared to traditional methods like bank transfers, Bitcoin transactions have much lower costs. According to World Bank statistics, the average remittance cost can be as high as 6.25% of the transaction amount. This means that a staggering $62.50 flows to third parties for every $1,000 transferred to friends and family. In sharp contrast, the cost structure of Bitcoin transactions is very low. Regardless of the amount sent, Bitcoin transactions have a fixed fee determined by network conditions. Currently, the average Bitcoin transaction fee ranges from $0.70 to $3, equivalent to only 0.07% to 0.3% of a $1,000 transaction. As the transaction amount increases, this percentage fee naturally decreases, making Bitcoin a cost-effective choice for cross-border payments. Moreover, the transaction speed of Bitcoin is unparalleled. Traditional bank transfers, especially involving emerging countries, may take several days to complete. This delay is mainly due to the involvement of intermediary banks between the sender and receiver financial institutions. However, the average duration of a Bitcoin transaction is very short, only 10 minutes. This speed is unrelated to factors such as the location of the sender, receiver, time of day, or amount sent. This ensures that funds can be transferred almost instantly, making Bitcoin an ideal choice for urgent or time-sensitive payments. Furthermore, unlike traditional international transactions, Bitcoin transactions face no regulatory barriers. International remittances typically require cumbersome verification and approval processes. Remittance agents may require both the sender and receiver to provide identification and a range of personal details. Transactions are only approved once the agents are satisfied that the transfer is legitimate and complies with all regulations. This regulatory maze significantly delays the transfer process and increases overall costs. However, Bitcoin transactions do not require such approval processes. Once the sender confirms the transaction, it is broadcasted to the blockchain, and the receiver can see the Bitcoin in their private wallet in about 10 minutes. This seamless and secure process makes Bitcoin an attractive choice for individuals and businesses seeking cross-border transactions. Finally, the decentralized nature and limited supply of Bitcoin increase its attractiveness as a medium of exchange. As a decentralized currency, Bitcoin is not controlled by any central authority or government. This ensures that transactions are not subject to political or economic pressures that may affect traditional currencies.

 Bitcoin: The Future Emerging Value Storage

Bitcoin has the potential to become a practical store of value, providing an interesting investment opportunity. As a store of value, Bitcoin possesses qualities distinct from traditional assets. Its limited supply and growing demand over time have driven its appreciation, similar to gold and oil. However, unlike these commodities, Bitcoin’s decentralized nature and digital form achieve unprecedented accessibility and liquidity. As a store of value, Bitcoin offers investors a hedge against inflation and market volatility. It is a unique asset class with the potential for diversification and significant returns. As more people recognize the value of Bitcoin, it could become the preferred method of storing wealth in the digital age. Furthermore, the convenience of storing Bitcoin in digital wallets significantly reduces the risk of damage or loss. These wallets enable investors to transfer their Bitcoin tokens with a simple click of a button. This unparalleled transferability is crucial when considering cashing out or liquidating investments. In contrast, traditional assets like art or wine involve complex and often costly disposal or selling processes. Finally, Bitcoin has appreciated at a faster rate than traditional assets. Over the past five years, Bitcoin has seen an increase of over 317%, significantly surpassing gold’s 58% increase and silver’s 49% increase during the same period. This significant appreciation rate demonstrates Bitcoin’s potential as a long-term investment and store of value.

 Bitcoin: A hedge against inflation for investors

Currency inflation is a global phenomenon that poses a significant threat to specific regions. In Turkey and Argentina, inflation levels soared to 50% and 104% in March 2023, eroding the wealth of the population. In Argentina, a $50 item now costs $102, clearly indicating a decrease in purchasing power. Venezuela, Zimbabwe, Sudan, and other emerging economies are also struggling to cope with high inflation. As a hedge against this economic uncertainty, Bitcoin provides a refuge for investors. Its decentralization and limited supply make it an attractive choice for preserving value during periods of currency inflation. Imagine if an investor were to invest $10,000 in Bitcoin. If Bitcoin remains stable or appreciates, inflation would no longer be a problem. The key is that investors can convert their Bitcoin holdings back into Turkish lira at any given time based on the current exchange rate. Therefore, if inflation continues at 50% and the Bitcoin price remains unchanged, investors would gain a 50% return in lira after conversion. This hedging ability makes Bitcoin a convincing choice for investors seeking to protect their financial assets from the erosion caused by inflation. It provides a certain degree of financial freedom and protection in uncertain economic environments. However, it is worth noting that, like other assets, investing in Bitcoin carries risks. The values of the Turkish lira and Bitcoin can fluctuate, leading to potential losses. To mitigate these risks, some investors choose to hedge their holdings with stablecoins like Tether or USD Coin. These digital assets are designed to maintain stable values by pegging them to the US dollar, offering a safe haven for investors seeking stability in turbulent markets.

 Bitcoin: Liquidity Market Operation

When investing in the digital currency space, Bitcoin remains an attractive choice for many. By 2024, one of the most prominent advantages of owning Bitcoin is its operation in highly liquid markets. Understanding this is crucial for any investor looking to navigate the world of cryptocurrencies effectively. Financial liquidity refers to the ease of buying and selling assets without significantly impacting asset prices. In the case of Bitcoin, this liquidity is unparalleled, providing investors with seamless market entry and exit points. Unlike traditional assets, Bitcoin trades on exchanges 24 hours a day, 7 days a week, ensuring investors can act based on market trends at any time. Data from CoinMarketCap shows the remarkable trading volume of Bitcoin. Daily trades worth billions of dollars occur, with average trading volumes ranging from $7 billion to $33 billion. This level of activity demonstrates strong interest and participation in the Bitcoin market, making it an ideal investment for those looking to capitalize on price fluctuations. Furthermore, Bitcoin’s market capitalization currently exceeds $550 billion, offering investors ample liquidity. Despite recent fluctuations from a peak of $1.2 trillion, this still represents a significant amount of capital available to investors. This liquidity allows investors to convert their Bitcoin holdings into fiat currency at any time, a process that typically takes only a few minutes. To cash out Bitcoin, investors simply need to deposit their holdings into a cryptocurrency exchange and create a sell order. The funds will then be credited to the user’s fiat balance, which can be withdrawn to a bank account. This straightforward process contrasts sharply with the cumbersome nature of cashing out traditional value storage methods. For example, selling physical gold requires involvement of physical brokers during standard business hours and does not allow for subdividing gold for smaller sales. Additionally, gold brokers often offer prices below market value, further reducing the value investors receive.

 Bitcoin trading discount: Opportunity has arrived

Recently, the price of Bitcoin has been fluctuating, causing many investors to hesitate and consider whether they should buy Bitcoin now. Experienced investors have recognized this opportunity and continue to accumulate Bitcoin while prices remain relatively low. As the trading price of Bitcoin is still far below its previous all-time high, entering the market today offers a 13% discount. However, discounted prices are not limited to Bitcoin alone; several top altcoins are also attractively valued. For example, the second-largest cryptocurrency by market capitalization, Ethereum, traded close to $5,000 at the end of 2021 but is currently around $3,100, representing a discount of over 35% from its peak. Even some of the best meme coins, such as Dogecoin, are trading at significantly discounted levels, providing investors with an opportunity to enter the market at a favorable price. History has shown that discounts in the cryptocurrency market during bear markets are profitable for investors in the long run. Taking Bitcoin’s past performance as an example, at the end of 2017, the price of Bitcoin reached a peak of $20,000 but then experienced a sharp decline, dropping by 85% over the following 12 months to a low of $3,200. An investor who purchased $5,000 worth of Bitcoin at that time would have seen their investment increase by over 2,000% by November 2021, reaching $100,000. Recently, Bitcoin has also experienced similar price declines, dropping to a low of $15,500 in November 2022. However, since reaching these lows, Bitcoin has rebounded strongly, hitting a 52-week high of $31,700. This means that investors who bought Bitcoin at the $15,500 low have since seen gains of over 100%, further highlighting the attractiveness of buying Bitcoin during discount periods in bear markets.

 Bitcoin Halving Event

The importance of Bitcoin halving cannot be overstated, as it represents a fundamental shift in the supply dynamics of this digital asset, making it scarcer and potentially more valuable. With the reduction in mining rewards, the rate at which new bitcoins enter the market slows down, ultimately driving up its value. This scarcity, coupled with the increasing demand for Bitcoin, often acts as a catalyst for new bull market cycles (periods of continuous price increases). History has shown that previous halving events have had a profound impact on Bitcoin’s price trajectory. Since its inception in 2009, Bitcoin has undergone four halving events in 2012, 2016, 2020, and 2024. Following this year’s Bitcoin halving, it could trigger a new wave of growth and appreciation. Considering this, investors and traders are beginning to prepare for this event, anticipating its potential impact on the market.

 Bitcoin Price Prediction: Predicting Significant Long-Term Growth Opportunities

If Bitcoin were to achieve such a milestone, rising from the current price of around $30,000 to $1 million, the resulting growth would be staggering. This implies a value increase of 3,200%. Furthermore, such a price surge would propel Bitcoin’s market cap to over $17 trillion, a figure worth further examination. To put this valuation into perspective, we compare it with some of the largest and most mature asset classes and markets. The S&P 500 Index, which tracks the performance of 500 large-cap stocks in the US, currently has a valuation exceeding $37 trillion. Meanwhile, according to estimates from the World Gold Council, the total value of all mined gold is approximately $12 trillion. Even the total US government debt exceeds $32 trillion. Despite the impressive numbers, some analysts believe that a $17 trillion valuation for Bitcoin is not unreasonable given its unique characteristics and global appeal. Unlike traditional assets, Bitcoin is not controlled by any government or central bank, shielding it from the policies and manipulations that often affect fiat currencies. Additionally, its operation is independent of the broader global economy, unaffected by borders or domestic currencies. This potential for Bitcoin to become a truly global asset class accessible to anyone with an internet connection is significant. Apart from its decentralized nature, Bitcoin offers various advantages that make it an attractive investment choice. For instance, it can serve as a store of value and a medium of exchange, enhancing its utility and appeal. Moreover, with over 1.4 billion people still lacking basic banking services, Bitcoin can provide a viable alternative for those without bank accounts. This represents an important untapped market that Bitcoin has the potential to enter, further driving its growth and adoption.

 What is the best time to invest in Bitcoin?

When considering when to buy Bitcoin, a long-term investment strategy is often the wisest choice. This approach allows investors to gradually build their investment in Bitcoin over time, avoiding the trap of trying to time the market precisely. Furthermore, a long-term strategy can help investors cope with the inherent volatility of Bitcoin, a defining feature of cryptocurrencies since its inception in 2009. The sustained long-term growth makes it an attractive asset for those with a patient investment outlook. CoinMarketCap data highlights the strong growth of Bitcoin, tracking the average prices of cryptocurrencies over the long term. Over the past decade, the value of Bitcoin has experienced significant fluctuations but has been on an overall upward trajectory. For example, just a year ago, the average price of Bitcoin was hovering around $21,362. Two years ago, this figure was $35,350. Three years ago, investors could purchase Bitcoin at an average price of $9,677. Going further back, four years ago, the price was around $9,912, and five years ago, it was only $8,181. Six years ago, the average price of Bitcoin was only $2,576, seven years ago it was $654. Eight years ago, the average price was only $289, and nine years ago, investors could buy Bitcoin on average for $601. Ten years ago, the average price of Bitcoin was just a fraction of today’s price, at only $97. Despite these significant fluctuations, Bitcoin has brought substantial returns to those who hold investments. For example, investors who on average paid $601 to buy Bitcoin nine years ago may have initially experienced a drop in value. A year later, the average price fell to $289, a decrease of over 50%. However, those who held onto Bitcoin for three years saw substantial returns. By then, the average price of Bitcoin had soared to $8,181, an increase of over 1,200% from the initial $601 investment price. Over a longer period, Bitcoin’s growth becomes even more remarkable. Those who invested an average of only $97 ten years ago have now seen their investment grow to nearly $30,000, achieving returns of over 30,000% in just a decade.

 Bitcoin Investment Guide, How Much Bitcoin Should I Buy?

When considering how much Bitcoin to buy today, investors must carefully assess the investment scale and consider various factors. First, Bitcoin investments should only be funded by disposable income to ensure financial stability. For example, an investor with a monthly income of $3,000 should allocate basic expenses such as rent, food, and utilities, with the remaining disposable income used for investments. Remember that the value of Bitcoin fluctuates, and profits from selling in emergencies may be lower than the initial investment. Therefore, avoid using funds needed for short-term financing. Additionally, investors must choose between dollar-cost averaging and lump-sum investing, strategies that involve spreading investments over time or investing a large amount upfront. We will delve deeper into these topics below to help investors make wise decisions about their Bitcoin investment portfolios. Many novice investors consider lump-sum investing in Bitcoin, but given the volatility of cryptocurrencies, this strategy may pose risks. On the contrary, a more cautious approach is dollar-cost averaging, which helps mitigate market volatility and optimize your investments. Consider an investor with a budget of $20,000. If they invested all their funds in November 2021 (when Bitcoin reached a peak of $68,000 per token), they would only break even when the price reaches that level again. This poses significant risk as Bitcoin prices fluctuate rapidly. Here, let’s also discuss the benefits of dollar-cost averaging. The investor decides to allocate $1,000 monthly over the next 20 months instead of investing the entire $20,000 upfront. By doing so, they reduce the initial investment risk and create a more balanced investment portfolio. Even with Bitcoin price fluctuations, the investor continues to invest monthly, averaging the cost over time. In this scenario, the investor’s average cost price of purchasing Bitcoin will be significantly lower than the initial $68,000. With each $1,000 investment, they average the price, aligning with the broader market. If the Bitcoin market starts to decline, the investor’s average cost price will further decrease. Conversely, if the market rises, they will start seeing returns faster than if they had invested all funds upfront.

 Bitcoin Overexposure Risk: Avoid Over-Investment

Experienced investors understand this concept very well, maintaining a diversified investment portfolio that aligns with their unique risk tolerance and long-term financial goals. There is no one-size-fits-all approach to diversification, as each investor’s situation is unique. However, there are several strategies that can help you achieve a balanced investment portfolio. One popular strategy is to diversify your cryptocurrency holdings. This may include investing in top cryptocurrencies such as Ethereum, BNB, Solana, Arbitrum, and EOS, as well as adding some lower-priced cryptocurrencies like XRP, Dogecoin, TRON, Polygon, and Stellar. By investing in a range of cryptocurrencies, you can capture the growth potential of the industry while reducing the risk of over-reliance on any single currency. Another important aspect of diversification is adding non-cryptocurrency assets to your investment portfolio. This may include traditional investments such as stocks, bonds, index funds, and commodities. By incorporating these assets into your investment portfolio, you can further reduce the risk of cryptocurrency volatility while still potentially gaining returns.

 Summary

After exploring the basic principles of Bitcoin, digital assets remain an attractive investment for many people. However, investors need to spend tens of thousands of dollars to purchase a complete Bitcoin. If you want to buy Bitcoin at a price below the market, you can consider virtual currency contracts, where leverage tools in the contract can allow you to enter the market at a lower cost and amplify your profits.