The concept of Bitcoin never really stuck for me. When I first heard of it years ago, I scoffed at the idea.
Yet, after reading a number of articles I’ve changed my mind on the subject and decided to invest in Bitcoin. In fact, in the past year, I had become anxious to plunk down a few hundred dollars worth of Bitcoin and to continue to buy even more now. I’d seen the light of digital currency.
If you’re reading this, there’s a good chance you’re considering buying Bitcoin, if you don’t already own some. Perhaps you’re hesitant about Bitcoin’s negative connotations, or you don’t fully realize its potential.
Here are several reasons that I eventually bought into Bitcoin, and I suggest you do too:
An Escape from Capital Controls and Other Financial Regulations
One of the biggest reasons Bitcoin has had many big moves in recent weeks is that much of the Bitcoin trading being done is in China. Living in China, people are subject to certain capital controls, which regulates the amount of money they can move in and out of the country. So, in order to get around these laws, many Chinese have turned to Bitcoin to get around the Chinese government.
India is another example. The Indian government recently banned 500 and 1000 rupee notes, curbing cash in the country. Many Indians turned to Bitcoin.
And how about Venezuela? The country has been subject to massive inflation, destroying the value of its currency. People are turning to Bitcoin to avoid losing their savings and purchasing power.
Though the dollar is stable for now, who knows where it will be long term.
When I initially questioned the value of Bitcoin, I had completely overlooked our current financial system. Our paper money is just that—paper! It only has ‘value’ because our government tells us it does.
As for Bitcoin, there is no central bank constantly manipulating rates. Nor do we have to worry about ‘currency wars’ with Bitcoin, because we’re not concerned about exporting goods with a weak currency, rather we just want a strong store of value.
A Universal Currency
Travel abroad and your American dollars are no good (save a few countries). Sure, black market currency traders will take your money, but most places won’t. Instead of changing currencies depending on which country you’re sending money to, why not just use a universal currency? This would simplify things immensely. You can also forget about things like the cost of a wire transfer at a particular bank, instead directly sending money to another bank account.
And Bitcoin doesn’t just have to be used for international transactions, it can be done as a replacement for your domestic currency. A big reason I love Bitcoin is that it seeks to undermine the monopoly governments have on money. In the USA, you can only use dollars, because the government has a monopoly on currencies. However, why not let the free market have a say as to which currency people can use? If Americans or Europeans or the Chinese prefer Bitcoin over their government denominated currency, let them use it!
Tremendous Growth Opportunity
One of the big reasons I got into Bitcoin was because of the tremendous growth potential I saw. Bitcoin started out as a means for black market trade to take place. Since then, it has piqued the interest of people like myself who are fascinated by digital currency, and want to hold it for the reason above.
It still has yet to catch on to the mainstream, but can you imagine what happens when it does? The growth will explode exponentially.
As Vinny Lingham has noted, right now Bitcoin is just being traded as a commodity. It will gain a ton of value when people actually starting using it day to day as a form of currency.
Could Bitcoin fail completely? Perhaps, but if it were going to fail, wouldn’t it have done years ago? Why is Bitcoin still going strong today, with a market cap of around $15 billion, if people didn’t actually believe in it?
Also, there will only be a total of 21 million Bitcoins ever produced. There are currently 16 million in circulation. As we approach that final 5 million over the next century (yes century), the price of Bitcoin will inevitably rise as the supply increase inevitably slows, and ultimately stops.
Aren’t There downsides to Bitcoin?
Of course. There are downsides to every investment and commodity. No risk, no reward as they say.
In the short-term, the Bitcoin market has been much more volatile than traditional equity markets. Although I only have a small amount of money in Bitcoin, watching the price spike then crash is a bit of an emotional roller coaster. I was having fun watching it going up and down, though long-term I’d prefer to see a steady price increase as opposed to an asymptotic rise.
Another issue with Bitcoin is that, while better than fiat currency, it lacks intrinsic value like gold. Even if Bitcoins were somehow manufactured physically, they’d have no purpose beyond monetary exchange. Unlike silver, for example, there is no non-monetary demand to keep the price of Bitcoin afloat. Silver and gold are metals that have an actual purpose in industrial production and are more than just a store of value.
It still is better than fiat currency. Unlike the U.S. Dollar, people use Bitcoin because they genuinely believe in the value of the currency, not because the government told them too. Moreover, the more people that use Bitcoin, the more stable and valuable it becomes.
The Future of Bitcoin
The future is bright for Bitcoin. There will be bumps along the way, such as the recent correction we saw in Bitcoin’s price drop, but these are part of the growing pains for a new phenomenon like Bitcoin.
My Bitcoin investment is long-term. I don’t plan on checking Bitcoin’s price daily, nor weekly (at least I’ll try not too!). Instead, I hope to check my Coinbase account in a few years and have many thousands earned.
Don’t wait until it’s too late to invest in Bitcoin! Even just a small investment in Bitcoin will go a long way.
I recommend Coinbase. As previously mentioned, Coinbase makes buying and selling Bitcoin easy.
If you open an account with Coinbase and make a $100 purchase or more, you will receive a $10 bonus! For disclosure, this is an affiliate program and I will also receive $10 worth of Bitcoin. So we both win!
Start your Bitcoin investment today by using the link below. You will see my name, with an invitation below to receive your $10 bonus after signing up. Then you’ll finally be a part of the digital currency revolution!