Investing in Bitcoin can seem perplexing, but it isn’t. In case you’re asking yourself where to buy Bitcoin, the only thing you need is an account at a cryptocurrency exchange (and a way to store your purchase safely). The fees at various platforms can differ considerably, so it’s worth looking around to find the one that offers the best combination of price, token choice, and service. As for where the Bitcoin goes after you purchase it, you can store it in a wallet you control or leave it on the exchange. There are now countless retailers accepting cryptocurrency, so you can spend your Bitcoin online to buy various products and services.
Bitcoin serves as an inflation hedge owing to its fixed supply and decentralized nature, which means it’s a safe haven for investors during market turmoil or heightened uncertainty. Real estate has historically served as the chief asset to protect against inflation, though it comes as no surprise. There’s a constant demand for homes, regardless of the economic climate, and as inflation rises, so do property values, houses behaving just like any other product. While not easily comparable to real estate, Bitcoin represents an option favored by most investors because it maintains and even increases its value over time.
Bitcoin Offers Advantages Traditional Properties Don’t
A store of value can be salvaged, reclaimed, and exchanged in the future without declining in value. Therefore, an investment with a good store of value is characterized by a never-ending lifespan and infinite demand. Gold has been the most widely held and trusted store of value for the last decades because it maintains its value in terms of purchasing power in the long run. Its liquidity, acceptability, and portability matter in times of social and economic instability. Bitcoin is often referred to as digital gold, meaning it’s regarded as a substitute for gold as a store of value.
Since its inception, many people have compared Bitcoin to gold, especially since it has a lower correlation with other assets, such as stocks. If Bitcoin is to function successfully as a store of value, it must maintain its purchasing power over short and long periods of time. Although its price may fluctuate, Bitcoin has historically maintained its purchasing power against other digital assets, proving to be an effective preserver of wealth. It’s independent of any intermediary, so it doesn’t have a central authority. The Bitcoin network is peer-to-peer, meaning that two or more computers are connected and share resources without going through a separate server.
There are many reasons to be interested in Bitcoin, but it’s undoubtedly the fact that it can be trusted to hold its value over time what draws attention. An ever-increasing number of people acquire Bitcoin with the intention of holding it for a medium to long period, and these are the best arguments for it:
Bitcoin Is a Fungible Crypto Asset
Bitcoin is a prominent example of a fungible token – it’s divisible and non-unique. You can exchange it for another asset of the same type or fiat currency (e.g., US dollars). If Bitcoin were to lose its fungibility, it would lose its utility as money and currency, which would ultimately impact its adoption. Each individual token is identical to every other token as they’re part of the same blockchain network. Nevertheless, the transaction history of each Bitcoin can be traced back to the public, distributed ledger because the blockchain is completely transparent. Since all coins have an equal value, exchange and trade procedures are straightforward.
Bitcoin Has a Limited Supply
There’s a limited supply of Bitcoin, in other words, a total cap of 21 million; all the tokens in existence are coins that have to be mined. You can always buy Bitcoin from existing users on exchanges. It’s impossible to know exactly how many Bitcoins have been stolen, but attention must be paid to the fact that stolen Bitcoin doesn’t mean lost Bitcoin. These coins are still circulating. Scarcity is at the heart of accruing and preserving value. Bitcoin has a unique property that’s needed and desirable, and if you add scarcity to the equation, you have a store of value.
Bitcoin Has a Low Correlation with The Stock Market
Assets move in relation to one another, so correlation can be used to gain a better understanding of the larger market or to assess the diversification among assets in a portfolio. Bitcoin isn’t tied to the sentiment in the stock market, so it’s a safe digital haven, a refuge for investors in times of risk. It’s reasonably liquid, which means it’s easier to transact than real estate. After all, what’s the point of profit if you can’t realize your gains? Bitcoin’s liquidity is high because there are numerous established, trusted exchanges on which you can buy and sell tokens.
Concluding Thoughts
Real estate has been used as a store of value throughout history and continues to be valuable, with many millionaires getting their wealth by investing in property. Its only weakness is liquidity, land and other investments being regarded as non-liquid assets because it can take months, years even, for a person or company to receive money from the sale. The fact that it’s so hard to find a buyer actually makes property less valuable. Housing, as well as the cost of living, have increased significantly, leaving already demoralized shoppers nothing to be grateful for. Buyers are struggling with limited inventory, especially new homes.
Rather than leaving the capital to gather dust in the banks, many prefer to invest in Bitcoin for higher valuations in the future. Cryptocurrency is low maintenance, can be exchanged for and used instead of fiat currency, and is relatively easy to take with you. Originally viewed as a speculative investment on account of its price fluctuations, Bitcoin has become a store of value and a means to increase value. Having Bitcoin is, therefore, important for anyone who wants to create a secure financial plan, allowing anybody to preserve their wealth for future use.
We’re likely to experience challenging times in the future, so there must be a credible store of value. Bitcoin offers an alternative to traditional wealth preservation methods.
