For many investors, cryptocurrency is not a valuable asset, and for years, this inclination to not place too much importance on digital currencies made sense. After all, even the most valuable and oldest cryptocurrency there is, bitcoin, was known to be highly volatile, which made investors shy away from using it. However, this has all recently changed. Bitcoin has been gaining a lot of momentum with investors, but how did this come to be? Why did bitcoin go from being a risky investment to a worthwhile one? To non-experts, bitcoin’s recent popularity might seem like a fluke. It is not a fluke or random fascination that will go away in a few years, though. If you want to discover how and why bitcoin is becoming a mainstream investment tool, read on to know more.
Bitcoin Is Now Used for Hedging Against Downturns
As we have mentioned, bitcoin was notorious for being volatile. For this reason, it was not considered a worthwhile asset. Yet, for around a year, bitcoin has retained its value. This value now ranges between $7000 and $9000. According to recent reports, experts also point out that the spread of COVID-19 has drawn the public’s attention to the perks of investing in cryptocurrency, especially bitcoin. Since bitcoin is highly able to maintain its value and is not as affected by economic downturns as fiat money and other traditional assets, it has become the best asset for hedging against fluctuations, which has, in turn, made it more mainstream and accessible.
There Are Many Trading Platforms to Choose From
Once upon a time, the platforms and apps that allow investors to trade in bitcoin were few and far between. Fortunately, this is not the case anymore. There are also many reviews that help investors choose the right platform for their needs. Trading website and software creators have quickly caught up to the fact that users require stricter security measures to keep their data safe and implemented a lot of changes that have made these sites and platforms more mainstream. Generally speaking, bitcoin trading software is extremely safe to use, but I suggest you learn more first about the one you are planning to try to avoid scams. When looking for a trading platform, investors are advised to look for one that offers a high profitability rate and secure transactions to avoid losing money or compromising their data.
Banks Are Warming Up to Bitcoin
Admittedly, it was hard for banks to support bitcoin due to its instability. Jamie Dimon, the chief executive of JPMorgan, went as far as calling it a “scam.” However, it appears that bitcoin is growing on banks and traditional financial institutions. JPMorgan, the biggest U.S. bank and bitcoin’s most vehement opponent, started extending its services to crypto exchanges back in May. Bitcoin investors usually complained of the non-inclusive treatment of banks, which included blocking the accounts linked to crypto businesses. So, JPMorgan’s deal seems like a step in the right direction, ushering a new era of inclusivity for bitcoin users.
Bitcoin Is the Best Tool for Diversification
Astute investors understand the importance of diversifying their portfolios. In fact, doing so has become a necessity in light of today’s ever-fluctuating financial markets. Stocks and bonds are not the only diversification tools on the scene now. Bitcoin is gaining much momentum in this regard. We are also seeing many investors putting more money into bitcoin trading, and this is just one of the ways that bitcoin is becoming more mainstream.
Bitcoin Encourages Transparency
Investors should always be on the lookout for fraud and scams, as transactions can be manipulated through sophisticated means. However, this is not the case with bitcoin. Since bitcoin uses what is known as “the blockchain,” investing in it entails a high level of transparency. The blockchain acts as a digital ledger of all transactions. This ledger is easily accessed and read by everyone and cannot be manipulated. There is also no middleman involved, i.e. a financial institution, thanks to the decentralized nature of bitcoin. This further increases the transparency of its transactions and makes bitcoin an even more attractive asset for investors.
Speaking of transparency, did you know that the blockchain bitcoin uses is impossible to hack? Bitcoin’s ledger is continuously updated, which does not give any chance for fraudulent individuals to manipulate it. When conducting transactions, you are the only one who controls the process. This means that no one can hack the blockchain or change the transaction information. The secure nature of bitcoin is a huge reason why investors are favoring it over other tools and assets.
Bitcoin Has Become an Accepted Form of Payment
A few years ago, the idea of using bitcoin to purchase goods or services was unfathomable. Nonetheless, it has become a reality in 2020. Although bitcoin has not become as mainstream as fiat money yet, many stores and educational institutions are warming up the idea of using cryptocurrency as a form of payment. While this development is not as widespread as we’d like, it is a strong testament to the effect of bitcoin on our society. It is also a good sign for investors who want to start using bitcoin for funding. Bitcoin is becoming increasingly popular and this trend is projected to continue in the future.
Investors Don’t Want Extra Fees Anymore
When you transfer money inside or outside the country, there are always extra fees to foot. Banks and other traditional financial institutions are continuously increasing their transaction rates. International transfers, in particular, have become prohibitively costly. This is why many investors are gravitating towards bitcoin. As a decentralized currency, there are not any hidden costs involved with bitcoin transactions. This makes it the perfect asset for investors who are sick of the greed of banks. Because the blockchain does not place any importance on location, a lot of people are now using this cryptocurrency for transactions.
Bitcoin and cryptocurrency, in general, are still a novelty. However, they are becoming increasingly mainstream as time passes. If you are an investor, we strongly recommend that you look into bitcoin as a hedging tool and a valuable asset. Just make sure to pick a secure platform if you want to dabble in trading.