The value of bitcoin reached an all-time high in its history above $60,000 in 2021. Although those that are not used to cryptocurrency may find it difficult to invest in cryptocurrency, you need to set these feelings aside when you are considering if it’s a good time to make money with bitcoin. In this article, we will consider if it’s not too late to make money with bitcoin.
Why Should You Invest in Bitcoin?
Bitcoin is a virtual currency that has a digital value (in other words, it is a cryptocurrency). It was presented in 2008 by Satoshi Nakamoto. Bitcoin is the most popular and oldest cryptocurrency. Bitcoin can be used just like traditional money and in payment systems. Payment platforms, such as Visa and Shopify, accept bitcoin as a means of making payment.
What Does History Have to Say About Investing in Bitcoin?
Bitcoin went beyond its all-time high and set new records in 2021. The cryptocurrency started in 2021 at $30,000 before it attained a record high of $64,000 in April. It then exceeded the April record to $68,521 in November, before crashing to the current value of $48,959.
These price movements may seem confusing for those that are new to cryptocurrency, and many may be wondering if they can still make money with bitcoin.
Everyone has different circumstances, so you need to understand your financial capability before you think of making money with bitcoin. With the way the market is currently, many can still benefit from bitcoin.
Bitcoin Market Capitalization
When you’re considering the potential of making money with bitcoin, many traders often study the market capitalization of the coin instead of the price alone. When you consider the price of a coin and its supply, the market cap of the coin will give you a clearer picture of what to expect from the coin in the future.
Taking up 40.75% of the entire capitalization of the cryptocurrency market, the market capitalization of bitcoin is over $900 billion. Although the price of bitcoin crashed recently, many still believe that the market cap of the coin will exceed that of gold in the future.
The market cap of gold is currently over $11 trillion. For bitcoin to go beyond gold, there needs to be an increase in the number of people holding the coin. Thus, the price of one bitcoin will need to be over $500,000 to reach the current valuation of gold.
Is it Too Late to Make Money with Bitcoin?
It is difficult to predict the movements in the crypto market. Hence, we need to consider the possible bull and bear scenarios that are made for and against the current price of bitcoin. The following will help you know if it’s not too late to make money with bitcoin:
Why it Might Be Too Late to Make Money with Bitcoin
It may already be too late to make money with bitcoin depending on the returns you expect. The chance for the coin to 2X or 3X this year keeps reducing every day. The chance even gets slimmer as new and more innovative altcoins are released into the market.
As the development of bitcoin diminishes, smart contract platforms that have usable decentralized apps (dApps) have increased the number of people that participate in the crypto market. The future of cryptocurrency seems to depend on the altcoin market, especially as DeFi (decentralized finance) leads the way.
Why It’s Not Too Late to Make Money with Bitcoin
Bitcoin has disappointed its skeptics several times. Savvy investors are looking for a real-time opportunity whenever they study its charts. As the number of corporate organizations that are interested in cryptocurrency (especially bitcoin) keeps increasing, there is still room for some gains in bitcoin.
The Future of Bitcoin
Most of the discussions today point to the fact that bitcoin is a hedge against traditional assets and inflation. Since bitcoin has a specific and limited supply, it has an advantage over almost all other cryptocurrencies that go through constant inflation.
Bitcoin is decentralized and trustless, hence, it cannot be affected by the failures of incompetent organizations or governments. It is also not prone to the games that those in the traditional financial sectors play.
Also, unlike the dollar, bitcoin is not negatively correlated with the stock market. The two move in the same direction sometimes. However, the cryptocurrency market has a mind of its own. So unpredictability can be considered as a form of protection when other markets are going one way.
More so, the performance of bitcoin has surpassed other investments ever since its inception in 2008. The ideas from history also indicate the coin’s future performance. Hence, it is worth getting into at any time.
Wrapping Up
When you want to make money with bitcoin, you need to take a long-term approach (and not a short-term trade). Buying bitcoin at $48,959 today appears cheaper than when it was at its all-time high in November. If we also judge from the previous trends, the coin may increase to higher prices as time goes on.
As far as cryptocurrency is concerned, bitcoin is a solid investment and must constitute a strategic portion of balanced portfolios. The coin has single handedly proven that the entire crypto market is viable.
However, it should be noted that investing in bitcoin comes with some risks. Your decision to buy bitcoin should be a personal one. You need to have faith in your investment strategy so that you can successfully trade and make money with bitcoin.
Carry out your research and create your strategy so that you can make informed decisions. That is the only way you will be convinced by what you do irrespective of the price at which you get into the bitcoin market.
Finally, you can also make use of dollar-cost averaging to get the best from bitcoin. This strategy allows you to build your portfolio little by little without being bothered by the price at which you’re buying the coin.