Should You Invest in Bitcoin?
While market watchers await the arrival of Dow 20,000, Bitcoin, the nascent digital currency nearing its 8th birthday, make actually reach its own milestone before the Dow as it continues its multi-year bullish rally towards $1000.
Since the Presidential election of Donald Trump, markets can more clearly price future expectations and in turn, both Bitcoin and the Dow Jones Industrial Average are rallying to near unprecedented heights.
The surge of Bitcoin?s price, however, has primarily been fueled through interest abroad, with geopolitical pressures and monetary environments in China, India, and Venezuela pushing investors towards the independently minded digital alternative.Over the years, Bitcoin has performed strongly with significant returns and continuing customer adoption. Of all currencies worldwide, Bitcoin yielded greater returns than any for 5 out of the previous 6 years (2011- Bitcoin +1500 percent, 2012- Bitcoin +299 percent, 2013- Bitcoin +5400 percent, 2014- USD +13 percent, 2015- Bitcoin +37 percent, 2016- Bitcoin +130 percent).
These are outstanding payouts over a 5-year stretch for any asset, stock, bond, derivative, or currency. With bitcoin soaring again, the underlying computational network stronger and more secure than ever, and a multitude of reliable, user-friendly wallets services, applications, and resources arising, is it time for investors to take a more serious look at investing in Bitcoin?
If an investor purchased bitcoin at any day other than a stretch of 11 days in late 2013, that investor would now be returning a profit. Because Bitcoin?s price started at near-0 and has shown so much fluctuation and growth, it has been difficult for the average investor to involve themselves confidently.
These, however, are side-effects of pricing an emergent digital asset with no predecessor. Now that the market has increased liquidity, security, and regulatory guidance, a more mature bitcoin industry is encouraging wider adoption. Ecosystem level metrics show that the Bitcoin network has been functioning well, as transactions per day have risen 258 percent over the past 2 years, while network participation fees and mining difficulty have grown similarly. In turn, investors should feel more confident in Bitcoin?s long-term viability and existence, as it cannot be easily shut down and incentives are not aligned among stakeholders for it to ?go away?.