Since The first transaction was verified 14 years ago, Bitcoin (BTC 1.05%) has been the undisputed leader of the cryptocurrency market, with a market cap now boasting over 20,000 tokens. With a market capitalisation of $330 billion, Bitcoin is a controversial asset.
But I’m bullish on bitcoin. Here’s why it’s the best cryptocurrency to invest in 2023.
Fixed Supply
A distinguishing feature of Bitcoin is its extremely finite supply; only 21 million coins will ever be mined. Unlike the majority of other digital assets, whose supply can be modified by any individual or group, the code of Bitcoin defines its supply limit, which can only be altered with majority consensus – a scenario that is still unlikely.
As new currencies are being created at an increasing rate between now and 2140, Bitcoin undergoes a “halving” event every four years, where miners are paid half the amount for processing transactions and protecting the network. In the long run, Bitcoin’s fixed supply cap combined with increased demand, and the creation of fiat currency, will push the prices of Bitcoin up.
To compare, if demand for physical gold were to suddenly skyrocket overnight, it would make it economically viable for companies to find new ways of mining more. Therefore, the supply of gold could be increased without any limits. This concept of a dynamic supply does not apply to Bitcoin.
Huge Addressable Market
Unlike Ethereal, Cardano, or Solana, which are all designed to enable users to partake in specific use cases such as gaming, non-fungible tokens, or decentralized finance, Bitcoin has been primarily used over its history to store value. The price of a coin has risen by more than 12,400% in the past 12 months, despite being extremely volatile – April 2013 according to the latest data on coinmarketcap.com. Such performance is unmatched by the total returns of either the S&P 500 or the Nasdaq Composite Index.
Detractors love to highlight how Bitcoin hasn’t worked as a viable solution to inflation. The coverage has been good over the last year, but what is truly important is its performance over longer periods. When seen from this perspective, it is obvious that Bitcoin is one of the best ways to not only preserve, but also to increase wealth.
The Federal Reserve is viewing this as a temporary measure. Historically, the amount of federal debt has increased both in absolute terms and as a percentage of US gross domestic product. This implies that for our economy to continue functioning smoothly, we need lower interest rates and more stimulus policies. And this means that the dollar will continue to be devalued over time.
Consequently, Bitcoin’s fixed supply makes it attractive to individuals, institutional investors, and sovereign entities. This gives Bitcoin the potential to revolutionise the world.
Low Entry Price
In 2016, the highest ever recorded amount of $69,000 was reached. As of November 2021, the price of Bitcoin has dropped 75% over the past 14 months to $17,000. This lower price will be a major boost for long-term bulls, as it means they can purchase more Bitcoin for the same amount of dollars. However, one must be able to withstand very high levels of volatility when investing in Bitcoin.
Bitcoin has been traded as a high-risk asset, and its price has been significantly affected by the actions of the
