3 Main Benefits of Bitcoin
When Is A Good Time To Buy Bitcoin?
Bitcoin Works 24/7, Is Fast and Easy To Use
Traditional currencies can only be transferred when banks are opened on weekdays, and large amounts comes with unnecessarily high transaction fees. But, you can send $2 billion worth of Bitcoin from one end of the world to another with a mere transaction fee of $0.78.
No One Can Seize Your Bitcoin
Traditional currencies are housed in central banks and largely controlled by the government. In an unfortunate event when banks fails, there is a possibility that you lose everything and can only take back up to $250,000.
Also, traditional currencies tend to be scrutinized and require permission from various authorities (e.g. banks, government, financial institutions) when large chunks of money is being transferred out of the country. But, you can be your very own bank and not lose any Bitcoin that you own. Bitcoin can be used by anyone, anywhere, anytime. Bitcoin gives you the financial freedom to transact globally.
Bitcoin Has A Limited Supply
Traditional currencies can be and have been printed from thin air for decades. The $1 that you hold now drops in value ten years from now as more $1 is being printed. But, Bitcoin is scarce and there will only ever be 21 million bitcoins created. No one can mine or print more Bitcoin out of thin air.
There is a risk in adopting Bitcoin as an alternate form of currency. The risk is that Bitcoin isn’t adopted by the masses and doesn’t pass the currency test of being “accepted”. Simply put, it can fail at the societal level. However, it is tough to deny the facts that the aforementioned traits of Bitcoin certainly has its technological edges over traditional currencies. If you don’t believe in Bitcoin, I understand your stance. But if you do, and would like to purchase some Bitcoin for wealth preservation, here are some cherrypicked graphs that may be helpful for you:
When Is A Good Time To Buy Bitcoin? (Part 1)
This is not financial advice, but it seems that buying Bitcoin below the purple line (200 Week Moving Average) appears to be a more conservative move than buying it above the purple line. You’re more likely to earn when you buy Bitcoin below the purple line as compared to buying it above the purple line.
When Is A Good Time To Buy Bitcoin? (Part 2)
Bitcoin halving refers to an event when the amount of Bitcoins miners receive in exchange for processing transactions is cut in half, occurring once every four years. The most recent halving was in 2020, and the next one will happen in 2024. As time lapses on, Bitcoins miners need to use more energy to mine the same amount of Bitcoins out as compared to 4 years ago. The result is that the cost price of mining Bitcoin increases overtime. The cost price for mining Bitcoin is the cheapest in 2012, and it gets exponentially more expensive every 4 years till 2140. If it takes $15,000 to mine 1 Bitcoin, it makes very little financial sense for the miner to sell it below $15,000 at a loss.
When Is A Good Time To Buy Bitcoin? (Part 3)
The difficulty in mining Bitcoin increases as more people mine Bitcoin. Miners compete against each other for limited block rewards. With more participants and more computing power, the hashpower of the entire network increases accordingly. The fact that the bitcoin miner difficulty is increasing goes to show that more people believe that mining Bitcoin now gives them a positive Return-On-Investment (ROI).
When Is A Good Time To Buy Bitcoin? (Part 4)
Cryptocurrency is being adopted faster than the Internet.
When Is A Good Time To Buy Bitcoin? (Part 5)
“The best time to start exercising is yesterday, and the next best time is today” doesn’t apply to Bitcoin. The lowest price of Bitcoin in 2023 was around $16,500. No one knows the chain of events that would happen in the next 7 months affecting the price to go lower than $16,500. However, what we do know is that if you were to Dollar-Cost Average (DCA) into Bitcoin for a minimum of 4 years (e.g. using $10 to buy Bitcoin on a weekly basis), history has proven that you would be up by a minimum of +50%, and it doesn’t matter which year you started to invest in Bitcoin.
Final Thoughts
When it comes to Bitcoin and cryptocurrency in general, it seems like we have to study a zillion things. However, I’m for the idea that we simply need to identify the core principles — generally three to twelve of them — that govern the field. If these core principles resonate and make sense to us, these hierarchy of truths form our beliefs. Besides, it is safe to assume that no one’s success is proven until they have survived a calamity. Serendipity often masquerades as skill, and the only way to distinguish the two is to see who is still standing after a storm. Bitcoin has stood through many storms, and it appears to be a strong contender as the world goes through an impending banking crisis. There we have it — a simple article to send to our friends on why we believe in magic internet money!
