Bitcoin (BTC) has been there in the market for around ten years now, and many investors have put their faith in it so that the cryptocurrency has increased in value substantially. Also, as everyone knows, there are only 21 million BTCs available, out of which around 19 million has already been ‘mined.’ Somewhere near a million or two, BTCs can be said to be unaccounted because there is not much data available for them. Therefore, there can only be around a million BTCs available now that can be purchased by investors.
Therefore, the major question that arises at this hour is – whether 2020 is the right time to buy Bitcoin? Many reliable sites like the https://de.cryptoengine.app/ have carried elaborate articles on this issue, and it seems certain factors must be considered here for answering this question. We also try to look at these factors and try answering the question depending on them.
- A lot of available options – From the time Bitcoin launched in 2009, many new cryptocurrencies have also entered the market that has helped a lot of people and investors to put their money in them. Cryptocurrencies like Litecoin, Etherium, etc. also got their market share, but Bitcoin remains the favorite among masses. It is the earliest virtual currency to hit the system, and its prices have also been much higher than the rest. Also, the media glare that Bitcoin received all these years was way more than all of the rest combined. This factor also led to the soaring of its prices to a large extent.
- Quantitative easing – In 2020, due to the Covid-19 situation, the US Federal Reserve dug deep into its savings and introduced quantitative easing. This led to some investors putting their investment in Bitcoin so that they could hedge their funds against the potential devaluing of the Dollar that may take place due to quantitative easing. Some experts believe that as there is a limited number of Bitcoins available in the market, BTC may not be susceptible to the devaluing. However, the number of new BTCs that are being mined is always getting low. Thus, the demand increase and supply reduction can increase its value, which is also a basic principle of demand and supply.
- Traditional investments hit – Traditional investment instruments like shares and equities have seriously taken a hit in 2020 due to the ‘black-swan’ event of Covid-19. The transaction volumes of these instruments have considerably been impacted due to which many investors are placing their faith in the cryptocurrency despite the fact there can be substantial volatility attached to it. But so far, the virtual currency’s volatility has not been much during the year, and it is expected to stay the same all through the year and the next due to many other associated factors.
Moreover, investors dealing in traditional investment sources are slowly getting comfortable with Bitcoin and all that it has to offer to them. It can be a very good beginning for these investors as well as for the cryptocurrency itself as there can be more acceptance and recognition.
- Bitcoin halving – In May 2020, ‘Bitcoin Halving’ took place through which the number of available Bitcoin became half of what was earlier available. That effectively means less supply, and with Covid-19 still very much present globally, the demand is sure to pick up. ‘Bitcoin halving’ has also helped in appreciating the price of BTC, and after 2017, 2020 is the year that the cryptocurrency has seen an all-time high in prices. However, industry insiders maintain that the bull-run of BTC will be there for a few more years, and the current high is only the starting of that event. Some informed BTC optimists have even gone as far as to state that the virtual currency will hit the million-figure within two to three years from 2020. If that even happens partially, it would mean that the price of BTC will be somewhere five to six times what it is at the moment.
Therefore, after considering all these factors, it certainly seems to be the right time to invest in the cryptocurrency, although the rate at present may seem to be on the higher side for any layman. However, as an investor, it can be the best bet while going forward as BTC can be the best asset for the long-term.