[Bitcoin Investment] Bubble or Opportunity? 5 minutes to understand the prospect and price trend of Bitcoin

比特幣投資泡沫

Entering the second half of 2022, cryptocurrencies continue to weaken, and Bitcoin hits low levels more often, causing two extreme emotions of “fear” and “greed” in the market at the same time. Is Bitcoin still worth investing in? JPEX will immediately analyze the prospects of Bitcoin for you and teach you the best time to enter the market.

Does Bitcoin have a future? Explore Bitcoin investment value and future development

With the global geopolitical tension, investors have sold currencies to buy gold, and the prices of many cryptocurrencies have been dropping again and again. Many people are worried that the currency circle will fall into a bear market, and they are also curious about whether to buy Bitcoin at a low price. Bitcoin has been up and down in the past few years. What is the difference between this wave of decline and the past? Is Bitcoin still worth investing in? What is the future and development? The following JPEX analysis for you one by one!

What are the benefits of investing in Bitcoin?

Advantage 1: Prevent inflation

Cryptocurrencies are a type of deflationary currency, meaning that their supply decreases rather than increases over time. In 2008, Bitcoin creator Satoshi Nakamoto set the supply at 21 million. As of July 26, 2022, there are approximately 1.92 million bitcoins in existence.

If the market demand for Bitcoin is greater than the supply, the price of Bitcoin will rise. In addition, its supply is limited, so the magnitude of the rise in the price of Bitcoin has the opportunity to show in what order.

Advantage 2: High Potential Return

As the first cryptocurrency to be born, Bitcoin has always been regarded as the “leader” of cryptocurrency, and its acceptance has always been leading the market, attracting a large number of investors, financial institutions and enterprises to start. Therefore, compared with other cryptocurrencies, Bitcoin’s daily trading volume and volatility are higher, providing investors with more profit opportunities.

For example, in March 2017, the price of Bitcoin was $975.70, then just 9 months later, its price skyrocketed to $20,089. Since then, the price of Bitcoin has reached an all-time high of $65,000 in 2021, bringing very impressive returns to early investors.

Advantage 3: Accessibility and Liquidity

Unlike traditional fiat currencies, the “borderless” nature of Bitcoin allows users to easily transact with anyone anytime, anywhere, greatly saving administrative costs and waiting time. Coupled with the increasing acceptance of Bitcoin by countries and enterprises, Bitcoin has gradually been recognized as the purchase of goods and services, so that its accessibility and liquidity continue to rise.

Advantage 4: Portfolio diversification

As an emerging asset in recent years, Bitcoin provides investors with more diversified investment opportunities, allowing individuals and companies to diversify their investments to balance risks when needed. Improve the possibility of earning substantial returns in different market conditions.

What are the risks of investing in Bitcoin?

Disadvantage 1: No regulatory supervision

Like other cryptocurrencies, Bitcoin operates in a “decentralized” model and is not governed by any political or central authority. In other words, investors’ behavior of investing in Bitcoin is not protected by law and must bear all risks by themselves. Assuming the value of Bitcoin goes to zero in just one day, investors will also be unable to recover their losses due to lack of protection.

Disadvantage 2: Behavior cannot be reversed

Bitcoin’s “anonymity” is a double-edged sword. On the one hand, it allows users to escape from central monitoring, but on the other hand, it makes it impossible for users to trace every transaction and lacks security.

It is important to know that the transaction completed by Bitcoin is irreversible, and even if the amount or quantity sent is wrong, the user cannot get back the lost amount. If you accidentally fall into the Bitcoin scam, you will not be able to know the whereabouts of the money through the recipient’s information. At the same time, since bitcoins will be stored in the cryptocurrency wallet, and the login information is only known to the user, once the password is forgotten or lost, the user will no longer be able to access the private key and may lose all encrypted assets.

Should I invest in Bitcoin?

After all, Bitcoin is an investment product that has only emerged in recent years. In addition, the volatility is higher than that of traditional assets. Investors must measure their personal risk tolerance before deciding whether to enter the market and hold them.

Chakib Bouda, chief technology officer of payments company Rambus, said that Bitcoin’s biggest weakness is its security, with virtual currency exchanges in the past where hackers have stolen billions of dollars worth of bitcoin and other cryptocurrencies. Bouda also added that according to the current development, Bitcoin is expected to become a mainstream transaction currency in 10 years, but security issues still need to be focused.

If you’re not sure whether you should start investing in Bitcoin, here are 10 questions to help you evaluate:

Bitcoin

  1. Do you know what Bitcoin is?
  2. Do you understand how Bitcoin and crypto markets work?
  3. Do you understand the risks of Bitcoin?
  4. Can you handle the investment risks of Bitcoin?
  5. Are there any restrictions on Bitcoin transactions in your region?

Crypto wallet

  1. Which crypto wallet platform should you choose?
  2. Do you know how to open a crypto wallet?
  3. Do you understand the difference between hot wallet and cold wallet?

Bitcoin trading platform

  1. Which Bitcoin trading platform should you choose?
  2. Do you know how to operate “Deposit”, “Withdraw” and “Exchange”?

The future and development of bitcoin

Since Bitcoin first appeared in the investment market in 2008, the global financial ecosystem has set off a revolution, not only making investors aware of new possibilities in the market, but also bringing together multiple innovative investment projects such as non-fungible tokens (NFTs). ) and the birth of the Metaverse.

As the world further moves towards digitalization, the prospects of digital assets led by Bitcoin are promising, and it is believed that there is still a certain room for appreciation.

According to Gobankingrates, many multinational companies recognize and accept bitcoin payments, including computer technology company Microsoft, payment platform PayPal, coffee brand Starbucks, Internet service company Rakuten and video streaming platform Twitch. In the future, it is believed that more industries and enterprises will accept and use Bitcoin for payment, so that cryptocurrencies can gradually be integrated into our daily life.

Until July 26, 2022, the price of Bitcoin fell from $690 million to around $22,986.97. Despite this, the popularity of Bitcoin in large international financial institutions has not diminished. For example, Goldman Sachs has reopened its encrypted trading platform, Bank of New York Mellon has opened a digital currency custody service, and Citibank has also stated that Bitcoin Currency is the currency of choice for international trade. Meanwhile, both PayPal (PYPL) and Tesla (TSLA) have invested in cryptocurrencies in early 2021, showing that confidence in Bitcoin remains.

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