2020 Cryptocurrency Trends
For investors and businesses alike, 2019 has been a time marked with uncertainty. Trade wars have taken their toll on the economy and that leaves many to question their investment strategies.
One way to firm up your investments and offer a layer of protection against a fluctuating stock market is to diversify your portfolio, but is Bitcoin investing the answer?
The Past and Present of Bitcoin and Bitcoin Investing
Launched just over a decade ago, Bitcoin became the first decentralized currency to hit the national market, and with it came a slew of others — Ethereum, Litecoin, Dogecoin, Ripple, and NEO, to name a few. Since then, Bitcoin, as well as other currencies, have lived somewhat of dual life.
For some, cryptocurrencies represent an opportunity to further establish a global economy without the complexities of a multi-currency economy. For others, however, cryptocurrency, which often offers a level of anonymity, acted as a means to freely engage in the black market.
The popularity and success of Bitcoin ebbed and flowed from 2008 on, but in early 2017, the cryptocurrency experienced growth like no other and achieved an all-time high of nearly $20,000per coin. As you may assume, early investors, assuming they cashed out in time, made significant profits, especially considering some of the first bitcoins sold for pennies on the dollar.
As is often the case with uncharted and unexpected high-yielding investments, the bitcoin bubble broke and the coin’s value has failed to reach the historical heights of 2017. Since then, the value of Bitcoin has continued to fluctuate. At the time of writing, for example, the coin’s value, though still prone to fluctuation, has shown a somewhat steady increase since early 2019.
The Future of Bitcoin and Bitcoin investing
Does Bitcoin’s steady decline mean investments will steadily fall flat? Or, will the currency continue of series of ebbs and flows, with some of the spikes paying out significant earnings to those who stick with it?
The short answer is that no one really knows. You can scour the web right now and get a different opinion from cryptocurrency experts the world over. Why? For one thing, Bitcoin, and really cryptocurrency, in general, is still maturing. It’s a risky investment that can lead to huge gains as quickly as it can lead to big losses.
Conversely, acceptance of Bitcoin is growing, and realistically the first non-fiat currency to show promise at the global level. Some retailers, like Microsoft, even accept it as payment for certain goods and services. services goods or services.
Assuming there are no drastic changes to Bitcoin’s overall trajectory — one that allows it to become a legitimate currency — governments will need to continue their efforts to manage it alongside their fiat currency. And it’s not quite known how oversight and regulation will play out in the long-run.
Even Bitcoin’s near future is a bit uncertain, as the coin is expected to “halve” in the spring of 2020. Without going into the complexities of Bitcoin mining, halving refers to a decrease in the amount a bitcoin miner receives in exchange for the creation of a bitcoin.
Ultimately, halving can affect supply and demand. It happens approximately every four years, and in the past, it had a long-term positive effect on price. And though history often repeats itself, it’s unknown what will happen this time around.
Bitcoin Investing – Is It Right for You?
Even though Bitcoin has been around for a decade, it’s still marked with uncertainty. Gains can be incredible but losses can be devastating. So the question remains, “Is Bitcoin investing a good idea?” It’s truly all about timing and your comfort with risk.
If you’re looking for one pathway to investment, then Bitcoin likely isn’t a sound choice. But if you’re looking to diversify your portfolio and you have a high tolerance for risk, then Bitcoin, or one of the other vetted cryptocurrencies, can help you do that.