The importance of bitcoin

Bitcoin was launched in 2009 as the first decentralized cryptocurrency. Since then, Bitcoin has established itself as one of the most talked about and controversial financial innovations of our time. Despite the volatility and uncertainty that comes with Bitcoin and other cryptocurrencies, there are many reasons why holding Bitcoin for the long term can make sense.

scarcity

A key factor that makes Bitcoin attractive is its scarcity. There will only be a limited amount of bitcoin that can ever be created. The maximum is 21 million bitcoins, of which more than 18 million are already in circulation. In comparison, a central bank can print unlimited amounts of fiat currency at any time. The finite supply of bitcoins gives users a level of security and predictability that fiat currencies don't have.

decentralization

Another advantage of Bitcoin is its decentralization. Unlike traditional currencies, Bitcoin is not controlled by a central authority. Instead, it is controlled by a network of users around the world. Bitcoin's decentralization means that it cannot be manipulated by a single government or financial institution.

store of value

Another important reason it can make sense to hold bitcoin for the long term is its role as a store of value. A store of value is an asset that maintains or even increases in value over time. Bitcoin has shown over the past few years that it can be an effective store of value. Although bitcoin is highly volatile, it has seen a steady increase over time. If you hold bitcoin for the long term, you may have an opportunity to capitalize on this increase in value.

International Transactions

Another benefit of Bitcoin is its ability to facilitate cross-border transactions. Because bitcoin is decentralized and globally accessible, you can transact with bitcoin in real-time from anywhere in the world. Compared to traditional transfers, bitcoin is usually faster and cheaper.

Technological innovation

Bitcoin is not only a currency, but also an innovative technology. Bitcoin's underlying technology is the blockchain, a distributed database capable of securely and efficiently processing transactions. Blockchain technology has the potential to be used in many different industries, from finance to medical records. By holding bitcoin for the long term, you can benefit from the technological innovation that will propel this currency and technology forward.

diversification

Finally, owning Bitcoin can be part of a diversified investment strategy. A well-diversified investment strategy consists of different asset classes such as stocks, bonds, real estate and commodities. Owning Bitcoin can help further diversify the portfolio and reduce risk.

inflation protection

Bitcoin can also serve as a hedge against inflation. Since bitcoin is finite and cannot be manipulated, it can help protect the value of your wealth from inflation. While fiat currencies can lose purchasing power over time, bitcoin has the potential to hold or even increase in value.

acceptance and adoption

Bitcoin acceptance and adoption is increasing worldwide. More and more companies and institutions accept Bitcoin as a means of payment or as an investment. The increasing acceptance and adoption of bitcoin can help increase its stability and sustainability and generate long-term profits.

Technical improvements

The technical improvements of Bitcoin and its underlying technology, the blockchain, are constantly progressing. New features and applications are being developed to improve Bitcoin's usability and security. By holding bitcoin for the long term, you can take advantage of these improvements and keep your investments current.

Upcoming Rewards Halving

Every four years, the reward that bitcoin miners receive for solving complex math problems is halved. This is known as the "halving" and is said to help reduce bitcoin's inflation. The next halving is expected to occur in 2024. This can help increase Bitcoin's value over the long term.

Overall, there are many reasons why holding Bitcoin for the long term can make sense. The finite supply of Bitcoins, decentralization, role as a store of value, ability to facilitate international transactions, technological innovation, diversification, protection against inflation, increasing adoption and adoption, technological improvements, and the upcoming rewards halving just a few reasons why you should consider bitcoin as part of your long-term investment strategy. Of course, there are also risks and uncertainties associated with bitcoin and it is important to be fully informed and aware before investing in bitcoin.

by Mehmet Caliskan