Bitcoin is the #1 most popular cryptocurrency in the world with a massive market cap of over $730 billion according to Coinmarketcap.
Like most cryptocurrencies, Bitcoin has skyrocketed to over $39,000 per coin from its March 2020 lows of $3,000 as more investors purchase Bitcoin as a realistic hedge against fiat currencies.
Bitcoin is the official name of the cryptocurrency and each individual unit is called a satosti.
The fictional founder of Bitcoin, Satoshi Nakamoto, created Bitcoin as the people's money that maintains a limited supply (only 18 million coins) and independence from the central banking system.
Most people refer to Bitcoin in the BTC/USD price but you can convert Bitcoin to many different currencies around the world.
Bitcoin is similar to digital gold and carry very similar properties that make it attractive to investors looking for an honest hedge against the US dollar.
While Bitcoin transactions take longer to perform than altcoins like Ripple, Bitcoin is the first and most widely accepted cryptocurrency by a long shot.
How is Bitcoin Different From Other Cryptocurrencies
Bitcoin uses the blockchain to process transactions like there are several key differences between Bitcoin and other cryptocurrencies.
Some of these key differences are:
- There are only 21 million Bitcoins in total and just 18 million are in circulation
- Bitcoin transactions can take up to 20 minutes to complete and it isn't the fastest or most efficient way for crypto transactions
- Bitcoin isn't released into supply but can only be mined on a specific hashrate
- Bitcoin is a decentralized monetary asset that isn't owned or controlled by any bank or financial institution.
Is Bitcoin Safe and Legal?
Bitcoin can be volatile like any other asset and you will see major swings in the price depending on outside factors including the economy, celebrity influence, the stock market, etc.
When you save fiat currency like the US dollar, you don't take on any risk with your money.
However, your money loses purchasing power over time and cannot buy the same amount of goods/services in the future.
Bitcoin carries more risk but also has the potential for bigger gains.
Right now, it's legal to buy and own Bitcoin just like any other asset.
Perhaps in the future, the government may crack down on cryptocurrencies or increase its regulation to protect their corrupt monetary system.
Bitcoin is decentralized by nature so it will be difficult for governments to seize your Bitcoins.
Is Bitcoin a Good Long Term Investment?
Many people say Bitcoin is a scam or isn't really worth anything because it doesn't exist in the physical world.
The only problem with this argument is more people see the benefits of Bitcoin as a form of “digital gold” in a centralized government run world.
Bitcoin outperformed almost every other asset class since its inception in 2008 and greatly outperformed growth stocks like Tesla and Apple over the last 10 years.
There is even a movement to push for salaries to be paid in Bitcoin instead of US dollars (fiat currency).
People are waking up to the fiat currency money printing scam as they watch their buying power dwindle each year due to massive money printing.
Every currency will eventually go to its instrinsic value – zero.
However, Bitcoin has anti-dilution measures in place because the max supply of Bitcoins is 21 million.
That means you cannot mass produce or distribute Bitcoin, which gives it superior value over the US dollar or any government currency.
Bitcoin will outperform traditional interest paid on savings account and even some of the best growth stocks because it's scarce and in limited supply.
Bitcoin therefore is an excellent long term investment with around 200% CAGR over the last 10 years.
How to Invest in Bitcoin Step by Step
Bitcoin is easy to buy online thanks to Coinbase. I created a Coinbase account, verified my information, and purchased BTC once my account was confirmed.
The whole process is simple and easy.
1. Create a Cryptotrading Account
The first thing you need to do is create a cryptotrading account to invest in BTC. Coinbase is my favorite choice and it supports over 100 countries.
2. Buy BTC on Coinbase
Once you setup your Coinbase account, you can buy BTC easily.
Go to the BTC buy/sell page, enter your dollar amount, and select your payment method.
You can buy BTC with your bank account or credit/debit card.
3. Determine Your Entry/Exit Strategy
BTC is just like any other investment so you'll need a solid investment strategy.
If you're bullish long term then buy a lump sum of BTC and hold for the long run.
Another good strategy is to set automatic investments every paycheck or month to acquire BTC over time.
Bitcoin could be worth a lot more in the future as people seek out an alternative to stashing money in bank & checking accounts that earn zero interest.
It won't hurt you to invest a portion of your assets in Bitcoin just in case the price takes off.
If you don't want to buy Bitcoin from a cryptocurrency exchange then try these crypto stocks as an alternative.
My Long Term Bitcoin Price Prediction
Nobody thought Bitcoin would 12x its value since the Marco 2020 lows but that's exactly what happened.
Due to Bitcoin's scarce nature, I always have an open mind about its long term price potential.
Bitcoin doesn't trade like a stock, bond, or REIT so it's important to use a more volatile price prediction when thinking about future price targets.
Bitcoin may reach $1,000,000 by the end of 2021.
I know that sounds crazy but there are currently A LOT of corporations thinking about adding Bitcoin to the balance sheet.
MicroStrategy, Square, Marathon Group, and many others have already bought Bitcoin as a treasury reserve and I expect more companies to follow suit.
Why hold 100% cash that loses value every day? Bitcoin is scarce and provides a higher return on investment to shareholders.
Once corporations add Bitcoin to their balance sheets, consumers will follow and start saving & earning Bitcoin as a potential upgrade from just fiat currency.