With Bitcoin trading around $40,000, many readers are asking: Is it a good time to invest in Bitcoin?.
If we analyze some of the most popular predictions the answer is clear: Bitcoin still has much growth ahead and the current one would be a good time to invest.
According to analysts at JP Morgan, the price of Bitcoin will soar in the medium term to an estimated $146. 000, while the same investment firm believes it will reach $650,000 by the end of 2022.
If we look at the mathematical models that purport to — and succeed in — forecasting the price of Bitcoin, the Stock to Flow (S2F, hereafter). Such a mathematical model was created by a Dutch institutional investor, whose identity has not been disclosed, with a background in quantitative finance. So far the S2F model has managed to forecast with astonishing accuracy all Bitcoin movements and claims that its quotation will reach $288,000 in the current growth cycle (Reaching $1 million by 2024).
However these predictions, no matter how reputable their sources are, ring hollow as they contain no real arguments to back them up. That is precisely why we have decided to gather in this article real reasons why we believe that any investor, regardless of their profile and age, should have a part of their wealth invested in Bitcoin.
3 reasons to invest in Bitcoin in 2021
1. So that no one will manipulate or plunder your wealth
At this point in the movie, it escapes no one that the fiat or fiduciary monetary system (i.e., the traditional monetary system we all know) was created by world governments for their own benefit.
Fiat money was previously backed by gold. That is, governments accumulated gold in their vaults, and the money was nothing more than notes of exchange. We citizens could go to the central banks and ask them to exchange our bills for the corresponding gold.
So far so good. The money was backed by real value.
However, in 1971 Richard Nixon decided to violate the gold standard and stop backing money with real gold, a decision that would become known as “Nixon Shock“. Nixon realized that if money was no longer backed by gold he could spend the gold accumulated at the Fed, and in parallel print unlimited amounts of dollar bills.
Europe had already a few years ago left behind the gold standard (or the bimetallic standard, which used both gold and silver). At that time the dollar was used as the international reference currency worldwide, so it’s delinking from the gold standard was an issue with complex implications and consequences worldwide.
From that moment on, money was called “money by decree”: it only has value by government imposition, because the states force it to be so by law.
Since then central banks have had full control of the world monetary system and play with everyone’s wealth by carrying out experimental policies of quantitative easing (unlimited money printing).
States have full power to print as many banknotes as they wish, without them being backed by any wealth. It is evident that printing money does not create wealth for a country; on the contrary, it dilutes the value of the money in circulation and impoverishes the citizen by taking away his purchasing power without him hardly realizing it.
This phenomenon causes inflation and is responsible for the fact that 20 years ago a loaf of bread cost 30 cents and today it is difficult to find it for less than €1.
The value of money is diluted with each passing day.
Bitcoin is the only valid alternative we have to protect ourselves from the monetary manipulations described above. The Bitcoin, by the way, it was designed and programmed, is a decentralized currency, not manipulable or controllable by anyone, created to have a deflationary behavior –just the opposite of traditional money, the Bitcoin is “condemned” to increase in value with each passing year.
We do not know what will happen in the near future. In the best-case scenario, inflation will remain stable at 2-3% per year, so your fiat wealth will only evaporate at a rate of between -22% and -34% every decade.
However, it should be noted that the Federal Bank is printing dollars at an unprecedented pace: 40% of the dollars in circulation have been printed in the last 12 months. The price of meat and eggs in the US is skyrocketing worryingly. A hyperinflation scenario is plausible and could be just around the corner.
In either of the 2 scenarios posed investing in Bitcoin brings us undoubted benefits –and no downside.
2. Bitcoin is the new digital gold
With the arguments we have presented to you in the previous section, you may be thinking, “Why to invest in Bitcoin if I can invest in gold?”.
Investing in gold would be a great alternative were it not for the fact that the precious metal has been the victim of huge manipulations for decades, as Forbes reported years ago. At that time the European Commission decided to fine several international banks $1.07 billion for their blatant manipulations.
Did anything change after those sanctions? A conversation between several Bank of America gold traders boasting about how easy it is to manipulate the price of gold was made public this past week, Bloomberg reports Bloomberg.
For our good fortune, there is some consensus that Bitcoin is and will be the new digital gold; the new way to store value in the face of uncertain scenarios.
It is clear that Bitcoin is not the fastest cryptocurrency, nor the one with the lowest transaction costs, nor even the most private. However, there is no doubt that Bitcoin, being the first cryptocurrency, has an undisputed leadership position that, most likely, it will maintain for decades and decades.
One of the theses that precisely leads the investment bank, JP Morgan, to project the price of Bitcoin at $146,000 in the medium term is that they consider it as the new digital gold. And not only that: the investment bank has observed how there is a flow of money out of gold and into Bitcoin.
“Considering how big the gold market is, a shift out of gold as a safe-haven security would imply a big advantage for Bitcoin in the long run,” argues JP Morgan.
Bitcoin could overtake the gold market with relative ease. The new generations, who have a marked predilection for the cryptocurrency market, are gaining investment capacity and weight in the financial market with each passing day.
Millennials and Generation Z are indifferent to gold; however, they have a special devotion when it comes to investing in bitcoin and other cryptocurrencies.
3. For the potential economic returns of bitcoin
The most mundane of all reasons to invest in Bitcoin; but let’s be honest, we all want to make money. And the more the better.
In the last year alone, the Bitcoin has given its investors a return close to 400%, and that’s even though at the time of writing this article we are far from the all-time highs of the dominant cryptocurrency. What other assets offer us this kind of return?
The current Bitcoin price, around $40,000, gives us an excellent entry point with great profit potential for our investment.
There is a certain consensus among investors that Bitcoin will reach 6 figures (over $100,000) is not too long a period of time. In financial markets, over and above technical and fundamental analysis, there is an even more relevant factor capable of moving mountains: the collective narrative, the common belief..
Fundamentally, we have no doubt about how essential Bitcoin is to act as a counterweight to an obsolete financial system, deeply ill and manipulated by central entities.
Analyzing the Bitcoin price from a technical analysis point of view, we also determine that this is an exceptional time to invest. After Bitcoin has spent the last 3 months in sideways movement — in what we identify as a clear accumulation zone — it is currently testing the upper resistance of the formed dart box, whose support is located at $30,000 and upper resistance at $41,000.
If this upper resistance, which is currently being tested, is broken, there will most certainly be a rebound to the upside, with the price of Bitcoin heading straight to new all-time highs. If this hypothesis holds true, we could see the Bitcoin price reaching new highs in the coming months.
How to Invest in Bitcoin right now with a regulated broker
Although buying Bitcoin is relatively easy these days, it is not a risk-free activity. For now, we still can not go to our traditional bank to make the management, and there are many scams and deceptions that aim to trap the unwary.
Similarly, we find a multitude of exchanges (exchange houses) located in tax havens, China, or in places that do not require any type of regulation and do not offer any guarantee to the customer.
One of the few reliable alternatives we found is the broker eToro.com, one of the most well-known and widely used exchanges worldwide. Based in London, it is the favorite choice of more than 20 million investors worldwide. It’s fast, it’s easy and it has the guarantees required by the European Union.
eToro.com, with all the European regulations and guarantees required, is the only exchange we can recommend to our readers without reservation. In addition, eToro allows you to add funds instantly via Paypal, credit card, or SEPA bank transfer, among others. (If you want to know more about this broker you have at your disposal a complete review of eToro).
Creating an account at eToro.com takes no more than 5 minutes and is completely free:
> Create your free account at eToro.com <
And start investing in Bitcoin and other cryptocurrencies in minutes with a broker regulated by the National Securities Market Commission.
How to buy Bitcoins in 5 minutes on eToro?
1. Create a free account at eToro.com
For your convenience, you can log in with your Facebook account. Once we have entered our data, we will arrive at the following screen:
2. Deposit the funds you want to invest in Bitcoin
In the bottom left corner, click on the “Deposit funds” button. It will take you to the next screen:
Enter the amount we want to deposit. We recommend starting with small amounts, in the order of $500 or $1,000. There is always time to invest more money.
In this screen, we will have to select the payment method. You can choose between depositing funds by credit card, bank transfer, Paypal… In our case, we choose Paypal as it is a very safe payment method that offers protection to the buyer.
3. Buy the amount of Bitcoin you want
With the deposit made, click on the left menu “Instruments”. In the next screen you will find several cryptocurrencies to invest in:
In our case, to buy Bitcoins, we search for the symbol BTC and click on “Buy”. The following window will open:
We enter the amount we want to buy at this very moment ($1.000 in our case) and click on “Open Trade”. And at that very moment, We are already the proud buyers of a portion of Bitcoin equivalent to $1.000!
It should be added that, of course, eToro also offers us the option to sell Bitcoins when we decide that the time has come to liquidate our investment and take the potential profits. At that moment our cryptocurrencies will be sold at the market price and the dollars from closing the transaction will appear in our account. And not only that, but eToro also offers the possibility of “betting” down through orders known as short sell: These orders allow us to profit from an asset that is in decline.
