In a sector packed with assets that arrive on Monday and reach zero by Thursday, Bitcoin (Cryptography: BTC) As a cryptocurrency in itself, it is guaranteed to actually survive and perhaps even thrive in the long term. It will be the smartest coin to buy and hold it, and the longer your investment timeline, the better it will look.
Let’s look at three true reasons.
One of the core pillars of Bitcoin’s long-term investment papers is that it is designed to maintain purchasing power compared to Fiat currency. You’ve probably heard something along those lines before, but let’s take a moment to really unleash it.
Fiat currency is issued by the government. Governments tend to cumulatively issue more and more currencies over time, which is normal, necessary and expected. But that means that Fiat currency tends to lose its purchasing power over the long term as the amount of circulation rises.
Bitcoin, on the other hand, has a finite supply. There are only 21 million Bitcoins in circulation (already around 19.8 million cycles). Of that new supply, only a small fraction of Bitcoin will be mined in a week. And the difficulty of mining new coins only increases over time, making it even more difficult to create new supplies to meet existing levels of demand and create durable upward pressure on the coin’s price.
So, in contrast to Fiat currency, Bitcoin has a mechanism to escalate rarity, which becomes more valuable over time. You can’t print it like Fiat currency, and you can’t mess with the total supply like many other cryptocurrencies. So, even for decades, it has a clear runway to continue growing, even without much new demand.
Bitcoin is not the only cryptocurrency sold as a valuable, long-lived repository. It is also not the most unstable competitors in that category. Stablecoins are technically cryptocurrencies and are fixed at the value of Fiat currencies such as the US dollar, so their prices rarely move. However, Bitcoin is not trying to replace it with Stablecoins or Altcoin competitors.
The market capitalization is over $1.6 trillion. Even Tether, the biggest stub coin, is only valued at around $143 billion. Compared to Bitcoin’s positioning as “Digital Gold,” Litecoin, an Altcoin that was once branded as “digital silver,” is worth around $6.4 billion. There are no other assets in the Crypto sector that are as big, old and reliable as Bitcoin.
That is, when institutional investors try to allocate some of the vast amounts of capital they currently do to cryptocurrency, they don’t bother small fish because they can’t buy and sell at the scale they need without moving the price of the underlying assets. Therefore, their capital flows to Bitcoin, the mostly established winner of the sector.
Contrary to popular belief, Bitcoin is still actively under development. Along with the non-profit Bitcoin Foundation and a group of miners, we have a relatively small staff of highly motivated developers who will determine the technological advancements of the coin through a painstaking and ultimately democratic process.
However, unlike other cryptocurrencies, the technological development roadmap is not intended to turn your head exactly. Instead, it is intended to avoid breaking anything that works and only take action when necessary to protect the coin from technical threats or technical constraints that limit value. That’s exactly the right perspective for assets that investors want to preserve their value over time. Furthermore, the fact that decisions regarding the coin are collectively made and changes to them are proposed is comprehensively analyzed before proceeding to development.
The same cannot be said about Bitcoin peers, even if they can provide a roadmap packed with flashy technical specifications such as faster transaction times and features that are in demand for developers. For investors, it makes assets exceptional and as long as Bitcoin’s excellent governance model remains alive, it is a major contributor to the long-term retention paper.
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Alex Carchidi has a Bitcoin position. Motley Fool has a position and recommends Bitcoin. Motley Fools have a disclosure policy.
3 Reasons Bitcoin is still the clever long-term hold in crypto, originally published by The Motley Fool
