As Bitcoin hits its latest all time high, the world can’t help but take notice. While this year (and last) has been like no other, it continues to deliver surprise twists and turns. While Bitcoin bounces from one all time high to the next, is it still worth investing? As Bitcoin is over 50K, we explore 5 reasons to buy BTC in 2021.
Bitcoin: A Year In Review
In 2020, the cryptocurrency finally emerged out of the crypto winter experienced from bear markets over 2018 and 2019. After losing over 70% of its value following the notorious previous all time high recorded in December 2017, Bitcoin saw uninspiring trading activity. The start of 2020 stirred up new hope with an upcoming halving and a year of new opportunity. While the year was entirely unprecedented, Bitcoin rose above the ashes and proved itself to be a reliable asset far beyond just the cryptocurrency sector.
Bitcoin started last the year around the $7,500 mark, hitting over $10,000 in February. In March, the economic effects of the pandemic were seen across many economies and stock markets. In what has become known as Black Thursday, the stock markets witnessed their worst trading day since the Great Depression in 1929. Cryptocurrencies were no exception to the mass destruction, as Bitcoin witnessed an almost 50% drop in value in just one day.
The next eight months proved to be instrumental in the cryptocurrency’s existence. While countries printed money and handed out stimulus packages (sending their fiat into disarray), Bitcoin started a gradual incline, discreetly pulling itself from the trenches. May marked the third Bitcoin halving, causing some mild volatility as predicted. At this stage, BTC was trading around $8,500, attributing to its impressive correction. By August, its value had risen above the $12,000 mark.
In October, the cryptocurrency started an impressive uptrend that ultimately kicked off the supercharged bull run to its peak. That same month, the market experienced a huge vote in confidence from outside institutional investors. First, MicroStrategy invested in 38,250 BTC, making Bitcoin its primary reserve asset. The mobile payment app Square made similar moves as they announced that they had put 1% of the company’s reserves into Bitcoin (valued at roughly $50,000). The same month, PayPal also announced that it would be introducing digital assets to their payments platform. The widespread media attention and the increase in Bitcoin’s value proved that the digital asset is a force to be reckoned with.
On 30 November, Bitcoin hit a then all time high of $19,850, before climbing it’s way to $24,209.66 on 20 December 2020. By 2 January 2021, the cryptocurrency broke the $30,000 mark, and by 9 January the cryptocurrency broke the $40,000 mark settling at $40,271. As firms continue moving their reserves to Bitcoin (MicroStrategy, Square, Tesla, GrayScale) a month later on 9 February it reached a new all time high $46,496. By 21 February it hit the latest high of $58,330. Bitcoin has since corrected but continues to trade about the $50,000 mark.
5 Reasons To Buy In BTC in 2021
If you’re new to crypto, Bitcoin might feel somewhat overwhelming. You have die hard evangelists pushing Bitcoin as a primary financial system on the one hand, while high profile investors are likening it to rat poison and gambling on the other. Before you invest, we’d highly recommend getting familiar with both Bitcoin and the technology behind it.
Is it still worth investing in Bitcoin? We’d say absolutely. Here are 5 reasons to buy BTC in 2021:
1. Bitcoin Has Proven Resistant – Recovering From Many ATHs And Price Crashes
Looking at the historical price data of the original cryptocurrency, Bitcoin has seen many a crash, and made many a recovery. The digital asset has proven to have incredible stamina when bouncing back from market crashes. A few examples:
- In 2011, Bitcoin was trading at $30. Following the hack of Mt.Gox in November, the crypto dropped to $2 before recovering in 2012.
- In 2013, Bitcoin reached $260. Again, due to Mt.Gox (this time an issue with trading volumes and a DDoS attack) the cryptocurrency lost 50% of its value. BTC recovered within 7 months.
- Towards the end of 2013 the crypto hit $1,000 for the first time. Over the next two years the value dropped to $175. Two years later, it reached $1,000 again and went on to climb to $20,000 by the end of that year.
While market crashes are inevitable, the cryptocurrency has proven to offer strong recoveries over the years. With more mainstream media attention and interest outside of the crypto markets, the currency is only getting stronger.
2. Bitcoin’s Value Proposition In The Macro Climate
Created as a response to the Global Financial Crisis of 2007 – 2009, Bitcoin was built to offer an entirely decentralized payment system that does not need to rely on governments, banks or financial institutions. The currency is built to be deflationary, with a maximum total supply of 21 millions coins. This cannot be altered, and will inevitably drive the price up as supply decreases and demand rises.
The pandemic left a wave of destruction across global markets leaving no country unaffected. The latest global financial crisis has brought with it historically low interest rates, increased bailouts, and surging quantitative easing. In contrast, Bitcoin has proven to be a reliable alternative avenue, even offering a hedge fund against falling stock prices. Veteran investor, Paul Tudor Jones, likened Bitcoin now to the role gold played in the 1970s.
Raoul Pal, CEO of Real Vision, commented that “huge quantitative easing of fiat meets the hardest money that automatically quantitatively tightens. Bitcoin wins. This is one of the best set ups in any asset class I’ve ever witnessed… technical, fundamental, flow of funds, and plumbing.”
3. Bitcoin Has A Bullish Stock To Flow Model
Stock to Flow (S2F) is an investment term that seeks to establish the scarcity of an asset. The total supply in circulation is the stock, while the amount of new supply per year is represented by flow. With Bitcoin’s total supply already known, the instrument can be held to strong authority.
This year, following the halving, Bitcoin presented S2F ratings of 56, the same as gold. However, following the next halving in roughly 4 years, Bitcoin will be twice as scarce as gold. Grayscale Investments furthered this thought, adding that “Commodities with high stock-to-flow ratios such as Bitcoin, gold, and silver have historically been utilized as stores of value.”
According to this trader’s findings, if the model holds the cryptocurrency would be worth $288,000 in this current cycle.
4. Bitcoin Was The Best Performing Asset Of The Last Decade
The cryptocurrency overshadowed assets such as gold, S&P 500 and long US bonds as it displayed incredible returns on investment from 2010 to 2020. Wall Street investors and even banks have taken notice, expressing bullish interest.
Thomas Fitzpatrick is the head of CitiFXTechnicals market insights and was commissioned by Citibank to write a report for their institutional clients. He stated that “A decoupling of gold from fiat currencies, the Covid-19 pandemic and the desire for central banks to pursue aggressive quantitative easing policies could lead to future explosive price growth in bitcoin” said Fitzpatrick.
5. Bitcoin Adoption Is Soaring
As Bitcoin is thrust into mainstream media, adoption tends to follow. According to data from Blockchain wallet, in 2020 their user base grew from 43 million to over 62 million users. Not just wallets, companies offering an avenue to onboard cryptocurrencies have experienced incredible growth, pointing to not only interest but action too.
Bitcoin Is Here To Stay
Bitcoin has been called many things, not to mention declared dead 389 times. This bull run has proven that the cryptocurrency is a formidable asset and one that is going nowhere. As it continues to grow steadily year on year, the returns witnessed have been staggering. As Bitcoin goes over 50K, we’ve offered 5 reasons to buy in BTC in 2021.
Users can easily onboard the crypto asset and buy Bitcoin with simply a credit or debit card, and make use of the military-grade wallet facilities at Oobit. Presenting gains of 36,889.92% over the last ten years, how could you not want to be a part of this revolutionary asset class?
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