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Is It Too Late to Buy Bitcoin in 2022?

Is It Too Late to Buy Bitcoin in 2022?
Written by publishing team

Even after it’s down nearly 40% from its recent high, Bitcoin (CRYPTO: BTC) It was a great investment to own in recent years. Since January 2017, the top in the world Cryptocurrency The sport is up over 4500% and now has a total value of about $800 billion. during the same time, Standard & Poor’s 500 by 103%.

If you’re on the sidelines, you might be wondering if it’s too late to join this booming asset class. I don’t think so, because this technology is still in its early stages and has a long development path in the future.

Here are three reasons why buying Bitcoin is a good idea in 2022.

Image source: Getty Images.

1. Continuing institutional adoption

Even if it has not made progress towards becoming a medium of exchange, Bitcoin has already established itself as a meaningful store of value. But its initial promise to become “digital gold” remains elusive. This means that the total value of the world’s gold is approximately $9 trillion Bitcoin can rise 10 times And its value is still less than the precious metal.

Allocating a small portion of the wallet to Bitcoin is attractive to both individual and institutional investors. Bitcoin is not closely correlated with other financial assets, and this separate market position can provide the advantages of diversification. And there are already many financial products focused on Bitcoin, making it easy to gain wallet exposure for those who aren’t comfortable owning the cryptocurrency outright.

Cathy Wood of ARK Invest believes that if institutional portfolios own 5% of their assets in Bitcoin, the crypto price will be $500,000 per coin. I’m usually not a big believer in her wild expectations, but I don’t think those expectations are crazy. Of course, it may take many years to get to this point, but there is certainly the potential for a no-brainer portfolio addition to become widely accepted.

2. Real-world use cases

Besides being considered today as a legitimate store of value, as I just discussed, Bitcoin has the potential to be a medium of exchange in real world transactions. Sure, volatility is still high, which is why many bitcoin naysayers believe there won’t be much benefit at all. But its usefulness in less developed countries is obvious.

According to Statista, India was the largest recipient of remittances in 2020, with $83 billion sent into the country from foreign workers. World Bank data shows that the average fee for sending money to India was 5.2% for a $200 transaction. The lower the dollar number, the higher the percentage fee. This scenario does not make much economic sense.

Bitcoin provides a viable solution. Since the digital currency can cross international borders almost free of charge, as much as $4.3 billion from money transfer companies can move into the pockets of Indian citizens. The direct economic impact can change the lives of these people. Of course, it is definitely necessary to have an affordable smartphone, with access to fast internet. But you get an idea of ​​how Bitcoin is displacing the overpriced financial intermediaries that are basically a tax on the people of poor countries.

3. Growing infrastructure for products and services

The ability to own and handle Bitcoin would not be possible without the necessary technological infrastructure. For example, companies like to forbid (formerly Square) and Robinhood Facilitate buying and selling bitcoin. Queen Piece, with l Visa Debit card, allows customers to spend cryptocurrency in regular stores and earn cryptocurrency rewards. And in March 2021, PayPal Introduce Checkout with Crypto For its vast payments network of more than 400 million active accounts.

There is a need to create smooth slopes on the Bitcoin network to achieve greater adoption. Jack Dorsey, founder and CEO of Block, dedicates his life’s work to developing Bitcoin. The change of his company name from Square to Block hints at a future focus on blockchain. TBD and Spiral, are the lesser known crypto-focused parts of Block. The former aims to build a decentralized exchange to convert fiat currencies into Bitcoin, while the latter is working on developer groups to improve the functionality of a Bitcoin wallet.

Bitcoin has been one of the best financial assets you can own over the past several years, so you might think you’re late to the party. But think again. This cryptocurrency still has a long way to go. For a well-diversified portfolio, it could still make a nice addition in 2022.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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