Does Bitcoin Make for a Sound Investment Strategy in 2021?

Cryptocurrencies have gained a lot of credibility and interest in the past half decade. What many people would consider a watershed moment; would be the Bitcoin boom and bust of 2017. Bitcoin rose to a value of a little over $20,000, and then crashed. That was the time many people got into Bitcoin for the first time. 

Since then, currencies like Ethereum, Dogecoin, and Ripple have gained a lot of interest compared to before. Investing in cryptocurrencies is not considered the crazy, irresponsible thing that it once was. Even though the currencies are still considered as volatile and shaky, they’re not the gambles they once were.

However, if one thing hasn’t changed, it’s that in 2021 Bitcoin towers over them all. Bitcoin was the first cryptocurrency ever created and still remains as the most popular and well-known cryptocurrency in the world.

Is Buying Bitcoin in 2021  a Good Investment?

Buying Bitcoin in 2021 is still considered a high-risk investment. However, you have to realize that high risk investments are made all the time. People investing in real estate, stocks, and bonds all invest in low as well as high-risk commodities and securities. What that means is, you should make sure to do your research and due diligence before investing. If you just found out about a stock and put your money in without doing the least bit of due diligence, that would be risky.

Similarly, with cryptocurrencies, you should always do your research and find out what the risks are. Bitcoin is no different. At the moment, it is hovering around $58,000 as of this moment. Its current value is the result of a huge boom that occurred at the end of 2020. Its value soared from $6000 to above $60,000 in a matter of months.

For those that got int at the right time, the investment was clearly highly profitable. However, the volatility of Bitcoin poses a challenge. Its value is dependent seemingly on just sentiment. It has nothing to do with anything real or anything tangible. So, it is one of the highest risk investments you could make in 2021.

However, that’s just part of the story.

How Risky Is Bitcoin?

Bitcoin is a digital currency which is not backed by any government or private entity on earth. Its value is not dependent on the market cap of a company nor the natural resources of a government. It’s simply a currency that has become extremely popular in the world of today. While some believe that it’s the next step in the evolution of money, others believe it to be an elaborate scheme.

However, things are much more complex now than they were a decade ago. When Bitcoin was founded in 2009, very few people knew of it, let alone trusted it to make a profit. However, today, large companies, banks, and even governments are considering adopting it for transactions.

In 2021 Bitcoin Has Many More Backers

Some big brands which have accepted Bitcoin as payment include Starbucks, Tesla, and several casinos. Banks which have accepted Bitcoin as a means of transaction include Fidor Bank, Barclays, USAA, Ally Bank, and the National Bank of Canada. Even Goldman Sachs, one of the largest banks in the world, has started to accept Bitcoin.

The acceptance of Bitcoin by these banks for both consumers and merchants has granted Bitcoin much greater legitimacy. This legitimacy seems to be part of what has given it the boost in growth. While it may not be enough to justify its jump to $60,000, it’s definitely made the currency more real.

If you require further proof, there are major active Ecommerce platforms which accept Bitcoin payments. For example, Shopify store owners can accept Bitcoin through integrations with Coinbase, Dwolla, and BitPay. Even PayPal has announced that its users can now pay in Bitcoin and other “leading assets” with various vendors.

Buying Bitcoin in 2021 is Not Risk Free

Bitcoin has a history of being used for unregulated purchases and transactions. It has been used to purchase illegal materials like smuggled weapons, underage pornography, and even finance terror groups. In fact, millions of dollars’ worth of Bitcoin is seized annually and auctioned off.  People have made a fortune bidding on them.

All that to say, there are a lot of bugs to work out when it comes to dealing and trading in Bitcoin.

Verdict?

Well, it’s complicated. Bitcoin can not be called an actual currency in the traditional sense. However, since all these big wigs are throwing in with the currency, it can no longer be called a bad investment at face value.

How to Invest in Bitcoin?

As with buying any other currency, you should do it in a well-regulated, and well-trusted market. You should stick with known exchanges like Coinbase, Kraken, or Binance to buy and hold your investments. These platforms are trusted voices in the world of cryptocurrency and beyond. They have systems in place to quickly setup accounts, customer reps to help you, and lots of other services.

Don’t start by buying cryptocurrencies from an anonymous dealer on the internet. Remember, cryptocurrencies have been used for, and continue to be used for fraud. Regulated crypto exchanges at least have systems in place to keep your currency secure and your information private.

With anonymous dealers, you can never be sure if your information is leaked or if your wallets are compromised. When you get a little more familiar with the currency, you can hold it in your own wallet. Until then, rely on the exchanges.

Transaction Fees

As with any larger system or player, you will have to pay a higher fee to buy and sell cryptocurrencies on exchanges. You can make do with private dealers if you want, and they’ll charge you much less. However, as a beginner, it’s important to trust a regulated system and pay for the security and peace of mind being offered.

Now that you know the way and the risks, you can decide for yourself if you want take the plunge into Bitcoin.

“As a Blogger, my content may include affiliate links from advertisers such as amazon and google, I may earn money from actions readers take on these links, such as a click, purchase, or subscribe at no cost to you. However, These are tools and products that I recommend fully and have helped my blog tremendously.”