Is Bitcoin a Good Investment in 2021?
While some believe that Bitcoin can quadruple in 2021, others are still skeptical. Considering the indicators and recent reports, Bitcoin has a promising feature. However, people should be careful of speculative behaviors in 2021 due to the internal dynamics of digital markets and ongoing coronavirus and its impacts on the world economy, especially financial markets.
An analyst from JP Morgan claimed that, in the long term, Bitcoin could reach $146,000. Other strategists predicted various prices for Bitcoin that forecasts range between $65,000, $170,000 to $318,000 and $500,000. Even the big difference between the predictions illustrates the coming of a hot year for Bitcoin. There is, however, always a considerable risk in the digital markets, likewise the financial markets. Investors take the risk of losing money when they invest in stocks, forex, or commodities. In the same way, there is no safe investment when it comes to cryptocurrency. Therefore, it is important to consider the risks regarding the possible investment options in digital assets.
For instance, volatility is a significant indicator for people who want to invest in Bitcoin. While Bitcoin’s volatility relatively declines it remains volatile. High volatility can bring big profits, but it can also cause significant losses. On the one hand, volatility is an advantage of cryptocurrencies that makes the market very dynamic. On the other hand, volatility makes it difficult to predict the price of a cryptocurrency.
Adoption and mainstreaming of Bitcoin is a clear advantage for investors. In 2020, pioneering Fintech companies like PayPal and Square had taken a step towards adopting Bitcoin. While the world-renowned digital payment service PayPal enabled its clients to purchase and sell Bitcoin and other digital currencies, another prominent payment service, Square, bought 4,709 Bitcoins for $50m.
Another significant development concerning the future of Bitcoin is the tendency embraced by more and more people that regard Bitcoin as a store of value. This attitude towards Bitcoin will strengthen its status and contribute further to its adoption by the mainstream. Some analysts predict that Bitcoin can compete with gold and turn into an alternative currency in the long term based on the increasing trend of considering Bitcoin as a store of value rather than just a means of payment.
There is no doubt that Bitcoin will be a good investment option for investors in 2021. Despite possible speculations and volatility, there are many beneficial opportunities in investing in Bitcoin and other digital assets. You can keep yourself updated on the latest developments on Bitcoin and other cryptocurrencies by following our blog.