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Is it Wise to Buy Bitcoin Given the Uncertain Situation in the Markets?

2022-06-07 08:58:44
Is This A Good Moment To Buy Bitcoin?
There is no doubt that Bitcoin is gaining more and more credibility among institutions as well as ordinary people, especially because of its continuous developments in terms of usability and security. Just four years ago, general skepticism was still the dominant sentiment, because Bitcoin price live had suddenly dropped and was followed by the 2017 bull run. Now, the narrative has changed, especially after big companies, like Tesla or Mastercard, joined the party with crypto payments and adoption. Bitcoin recently stepped up to the top 10 most capitalized assets in the world, and considering its young age, it may be able to climb even higher.

The intensification of geopolitical tensions are having worldwide impacts on commodity prices In addition, the economic and financial disruption are increasing the issues that were already present in the post-pandemic economy. Inflation is not only a problem in the United States, but across the globe, the US inflation rate currently being near its highest levels in 40 years. The Federal Reserve has begun to raise interest rates to combat inflation aiming to get prices back under control, but this is unlikely to happen. Today, it is more important than ever to understand why Bitcoin could be an excellent asset to fight inflation.

What Are the Factors that Make Bitcoin a Store of Value?

Since central banks began printing huge amounts of money while trying to cushion the economic damage caused by the pandemic, many people have realized that the current monetary system is not as stable as they have always led us to believe. These measures may be necessary, but the result is that inflation continues to rise and we will most likely face another economic crisis in the future.

The supply of Bitcoin has been algorithmically capped to 21 million coins, which means that it cannot be printed indefinitely. Moreover, the digital coin’s annual rate of mining dips by 50% roughly every four years. Bitcoin’s annual rate of production will be approximately half of gold’s and will continue to go down, which makes it more scarce than the metal and drives up its value. In fact, many people consider Bitcoin as an excellent reserve of value equal to gold, or even better.

The decentralized structure of Bitcoin takes it out of the control of centralized authorities. Its network is very resistant to external attacks seeking to alter its monetary policy. In a nutshell, Bitcoin is resistant to any type of centralization and no other currency or metal comes even close to it.

Last but not least, it is possible to send Bitcoin to any part of the world at very low costs nowadays, without incurring any kind of limitation by governments and institutions and more importantly, without asking anyone's permission.

What Is the Bitcoin Situation at the Moment?

According to the crypto exchange Gate.io, bitcoin is trading between $29,000 and $31,000, price certainly very far from its all-time high of $69,000 reached in November 2021. However, the value stored in Bitcoin has increased more rapidly than the inflation itself since the coin’s inception. In 2021, the cryptocurrency grew at 60%, considerably better than inflation in most countries meaning that Bitcoin has worked wonderfully well.Therefore it can be concluded that it might be wise to buy Bitcoin in these kinds of times of global uncertainty.

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