3 Reasons to Buy Bitcoin Like There’s No Tomorrow

Few assets have outperformed Bitcoin (CRYPTO: BTC) over the last decade. Now, since this top cryptocurrency has a market cap of $1.3 trillion and is constantly featured in mainstream financial news, investors have no choice but to pay attention.

But you may be wondering whether Bitcoin is still worth buying despite being near its all-time high price. There are three reasons why I believe adding this digital asset to your portfolio is still a smart decision.

fixed supply

Perhaps the most attractive feature of Bitcoin is its fixed supply limit. There will only be 21 million coins in circulation, this limit is written in the software’s code. With the ongoing halvings, the inflation rate continues to fall.

This fixed supply is in sharp contrast to many other asset classes whose supply may increase. Companies can raise more equity capital and issue more bonds. Gold miners may invest aggressively to explore previously uneconomic areas if the price of the metal rises sufficiently. In other words, supply can change to meet demand.

This is not the case with Bitcoin. Unless more than half of the blockchain nodes vote to change the supply limit (which is unlikely, given that this would fundamentally weaken the value of the entire network), the situation will remain the same.

Bitcoin’s strongest supporters see it as a direct rival to the current monetary system. Central banks have historically increased the supply of fiat money while reducing purchasing power. Bitcoin is a solution to this problem.

stamp of approval

Another reason to buy Bitcoin is related to a development that took place this year. I’m talking about the long-awaited approval of spot ETF products. Thanks to these investment instruments now available in the market, investors can conveniently gain exposure to the price risk of Bitcoin. No need to open a crypto wallet or manage storage. It can be purchased directly through major brokerage operators.

This is especially useful for institutions that want to access Bitcoin securely. Approval of these ETFs can be viewed as the Securities and Exchange Commission’s stamp of regulatory approval. The hope is that more capital will flow into the asset.

So far, $12.1 billion has entered ETFs. Since its approval date on January 11, Bitcoin’s price has increased by 43%, which is a positive indicator of increasing demand.

Expansion of infrastructure

Bitcoin is about 15 years old. This is a very small number in the grand scheme of things, as there are businesses that have been operating for over a century. So most people probably view the digital asset as a very new and risky asset that will eventually disappear and call it a Ponzi scheme or fake internet money.

The story continues

However, we cannot ignore the expanding list of financial products and services available in the Bitcoin ecosystem. The previously mentioned Bitcoin ETFs fall into this category. Numerous start-ups are trying to increase Bitcoin adoption in the long term by focusing on energy, gaming and artificial intelligence.

There is also fintech startup Block, a well-known company that is working on ways to increase the utility of Bitcoin. Whether this is streamlining payment mechanisms or simply making it seamless for people to buy, hold or sell Bitcoin, cryptocurrency is slowly becoming more integrated into the existing financial system.

Bitcoin can be compared to the early days of the internet. No one knew what its effects would be over time, but with the help of various platforms and applications built on it, adoption has increased greatly. It’s hard to imagine modern life without it these days. And Bitcoin could be the next big game changer.

Investors looking to purchase Bitcoin should consider Bitcoin’s stable supply, regulatory stamp of approval, and expanding infrastructure.

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Neil Patel and his clients have no positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Block. The Motley Fool has a disclosure policy.

3 Reasons to Buy Bitcoin Like There’s No Tomorrow Originally published by The Motley Fool