Bitcoin’s price breaks over $63,000, which is roughly the value to buy a Tesla car. It went up over 300% in the past year. Although plenty of people want to join the Bitcoin market, they still have much confusion. If you are wondering whether bitcoin and other coins are wise assets to invest in, this article will come in handy.
Is bitcoin still investable in 2021? As new investors, they are only aware that bitcoin price is at an all-time high. Because of the high price, lots of people may feel it is impossible to hold bitcoin. However, there are some mistakes about the relationship between the high price and the hard investment. Here we will analyze the reasons for bitcoin’s high price and introduce a simple way to invest it.
Regarded bitcoin as “digital gold”
Today, bitcoin is used as a kind of “digital gold”. That is to say, people around the world admit it as a scared digital asset，which is exactly determined by its characteristics. On one hand, bitcoin is the largest cryptocurrency with the largest market capitalization in the world, which is over $1.2 billion. It has been existed for about 12 years and remains to be the market leader all the time. Meanwhile, it is global and people around the world can own it as one kind of asset. On the other hand, bitcoin has a limited supply of only 21,000,000. Now, it has a current circulating supply of 18,590,300, meaning that it is as scarce as gold. When more and more people want to hold bitcoin, along with its demand increase, its price is more likely up.
Bitcoin Halving drives its price
Bitcoin is produced by bitcoin mining. Bitcoin miners create new blocks and add them to the bitcoin blockchain network via solving cryptography puzzles. This process will spend mining equipment, electricity bills, and time. Bitcoin miners also gain bitcoin in return. Back to the Bitcoin Halving event which happens once in four years. When it happens, the rewards of Bitcoin Mining are cut down by half, meaning there is less and less bitcoin in circulation. In fact, after three times halving in recent 12 years, the mining rewards have been reduced from 50 BTC to 6.25 BTC.
Throughout bitcoin history, its price rises generally after its halving events. After the second halving, which happened in 2016, the price of bitcoin continued to rise in the later one year, nearly reached $20 thousand. The same thing happened in the third halving in 2020. And you must know it, bitcoin has reached $60 thousand.
The bitcoin halving reduces the circulation significantly, thus triggering a higher demand, which will drive its price.
Source: Coin Metrics Network Data
Institutional investors join in
Owing to its all-time high price, bitcoin becomes popular and its adoption is accelerating. A number of people hold bitcoin in their digital wallets. At the same time, institutional investors such as Tesla, Square Corp, MicroStrategy, etc., have resorted their cash reserves into bitcoin, stating that bitcoin is a good store of value against inflation. Those strong forces will drive its price to rise. Most institutions are now considering bitcoin as one kind of financial investment. In the meanwhile, they accept it as a payment method. Such as Elon Muck, the founder of Tesla, has allowed customers to buy a Tesla with bitcoin. It can be predicted that bitcoin will be equivalent to cash in the near future.
Though you are aware of bitcoin’s value and decide to invest in it, you may still be confused about how much you can buy bitcoin.
What is the minimum amount to invest in bitcoin?
Retail investors, especially new traders, may be afraid of bitcoin’s high price and do not dare to invest in it. They consider that it will require a large capital to buy a bitcoin. This thought is totally wrong. The minimum amount of bitcoin investment depends on yourself, not its price. New users can choose to buy a fractional amounts of bitcoin for a try. As a cryptocurrency trading platform, CoinCola, allows its users to invest in bitcoin with a minimum of just 1 US dollar. What’s more, there is no trading fee.
In short, buying bitcoin is much like buying some goods in some ways. You need to follow 3 steps:
- Choose a country you live in, then you can use fiat currency to buy bitcoin. In this trading area, you will find lots of offers posted on it.
- Choose a vendor to buy bitcoin from.
- Transfer cash to the vendor via bank transfer. Once it is successful, the equivalent bitcoin will be added to your digital wallet.
Following the 3 simple steps above, you will buy bitcoin successfully. And your first bitcoin investment shall begin.
Last but not least, you should sign up for an account in CoinCola.