Having made its debut in 2009, bitcoin was the pioneer cryptocurrency. At the time, its existence – or rather adoption – was limited to a small community of avid techies interested in anonymity while operating in the deep web and using cutting-edge blockchain tech.
With time, the gospel of blockchain technology in terms of being a decentralized system that gives both anonymity and security spread across the internet. As the leading cryptocurrency, bitcoin boasts of $56,399 unit value and a market capitalization value of around $1.5 trillion.
PS – Had you invested $100 into bitcoins seven years back, it would be worth about $28 million today. Suppose you were somewhat a late-comer and invested $100 in 2014, your bitcoins would be worth $5,000 today.
Take note! We are careful not to use definitive figures because cryptocurrency value is one heck of a roller coaster ride. There are seasons it registers phenomenon fluctuations within a day.
Why the Rise in Cryptocurrency Value
Although centralized governance has its benefits, it has huge drawbacks when it comes to an individual’s right to privacy and security. Not forgetting that failed states use the government’s centralized systems to suppress dissidents. Blockchain technology has brought about reliable, anonymous yet secure decentralized peer-to-peer network systems. It is upon this architecture that cryptoassets such as bitcoin and Ether run.
As the pioneer cryptocurrency, Bitcoin is the top landing spot for individuals looking for decentralized finance (DeFi) systems. Coming second, at a far distance, is Ether and other altcoins (alternative coins).
In this DeFi system, you have unchecked ownership of the cryptocurrency without government or any bank regulations. In the records, your true identity is highly encrypted for ultimate anonymity and security. All confirmed transactions are stored in public ledgers that can’t be changed without bona fide authorization, making the system fraud-proof.
Other benefits of a DeFi system include immediate payment at very low-to-zero costs and protection from identity theft. The platform is readily available to anyone around the world with access to the internet, unlike the conventional financial systems, which slowly rolls out due to bureaucracy and the need for support infrastructure, thus leaving so many people unable to use it readily.
Got Cryptos in Wallet. Should You Cashin or Wait it Out?
Admittedly, cryptocurrencies are notorious for being highly volatile. It is certainly not an investment path for the fainthearted.
In December 2017, bitcoin had climbed to its then all-time high of $50,000. That was against a backdrop of a lot of demand for cryptoassets. Everyone was jumping in with both feet, not driven by wisdom but euphoria. Naturally, demand had surpassed supply by hundred folds.
A few weeks later, it took a big fall, leaving the newbies with a bitter taste of disappointment and anxiety. The veterans who bought bitcoins at low demand and were cashed in during the buying frenzy made a killing. With the following big drop in price after a mass buy, a lot of financial and legal experts started warning investors that the whole DeFi system was a bubble bound to burst soon.
It has since seen several climbs and falls over the years, but there is a consensus among investors that one should not sell their cryptoassets now. Bullish investors don’t start panic selling even when it seems there will be a big fall in the market. Experts believe it will rise to as much as $500,000.
“The next nine months will bring substantial appreciation for Bitcoin. I would not be surprised to see $50,000 next summer. Within four years, we expect the capitalization of all cryptoassets to grow five-fold with bitcoin at $100,000.” said Daniel Wolfe, a fund manager at the Simoleon Long Term Value Cryptocurrency Fund, while addressing a section of the media.
Bitcoin vs the Dow, Nasdaq and the S&P 500. YAHOO! FINANCE
Gapporov Behkzod, the CEO of Okschain, a new generation DeFi service using crypto, said: “Bitcoin is still at the beginning of its story. There’s more growth and corrections to come. I won’t try to make a prediction, but I suppose that we will see a $1,000,000 bitcoin price – and that is not a limit. A lot of our colleagues working with vast volumes daily are already talking about this.”
One of the biggest lessons the Coronavirus pandemic has taught investors is the need for market-resistant investments. Previously, investors venturing into cryptos were mainly after inflation-beating interest rates, but bitcoin and ether portfolios have shown strong growth and security amid the pandemic.
Chris Roper, a communications chief at MyConstant – a fintech startup – said, “People want to diversify into alternative investments, and cryptocurrencies offer everything from collateral-backed lending to store-of-value protection to forex-style trading.”
If one must Cashin, then how much?
The longer you hold onto your cryptoassets, the higher their worth with time. However, life happens; people get financial emergencies, need a boost to settle bills, and so forth.
“Someone who needs the money shouldn’t feel bad about selling 30% to 50% of their bitcoin. Although they should still keep at least half invested. That way, they won’t be filled with regrets years down the line should bitcoin’s value continue to surge.” said Josiah Hernandez, the chief strategy officer of Coinsource, a bitcoin ATM network.
For risk-averse investors, you may want to sell a number of your cryptoassets enough to get back your initial investment. Then keep the remaining to grow without any risks.
We have established that crytoassets – bitcoin and Ether – are a good investment with market inflation resistance, immune to government and banks regulations, and facilitate fast-secure payments. Selling your crytoassets at any point will leave you with regrets when their value rises even higher as extrapolated by industry experts.
However, experts warn that cryptoassets values are highly volatile. Don’t rush in with all you have and invest therein. You might invest today when the value is high, but log back in a few hours later, and the prices have fallen drastically. Instead, take a portion of your income that you are willing to lose and invest it, then forget about it for a year or so. Looking at your investment’s value every minute or hour will only be nerve-racking.
Finally, don’t make your investment all at once. Be patient enough and spread your investment window over time. That way, you will have bought your cryptoassets when they were low, lower, and lowest; hopefully, not the reverse. Doing that cushions your margins from the risks of buying at comparatively higher prices than the alternatives.