As Bitcoin peaked above $60000, showing almost a sixfold increase in price since last September, the buzz around cryptocurrencies got louder than ever. However, the long period of the bear market is still vivid in our minds. So how do we answer the question, “Is it smart to invest in crypto now?” Let’s explore the facts.
If we look back at Bitcoin’s history, we will see that it has kept a steady upwards trend – and the very attention the coin is getting now may be enough to keep it. As more leading companies (Paypal, Tesla, MicroStrategy, to name a few) are adopting Bitcoin as a means of payment or investing in it, it might mean that cryptocurrencies are finally getting their place in the world of mainstream finance.
Altcoins have been affected, too. On the one hand, crypto-fever around Bitcoin triggered growth for the coins of select mining companies, miner manufacturers, and blockchain development companies. On the other, as more people sell their altcoins in BTC’s favor, their prices might drop – so one should look at the big picture before making an investment.
Another factor is the macroeconomic situation caused by COVID-19. As the supply of national currencies increased in order to stimulate the economy, their value dropped. Bitcoin, with its finite volume of 21 million BTC, is like a remedy for the world tired of inflation. According to The Independent, in 2020 the coin performed 10 times better than the gold and the Dow Jones stock market combined.
What is the takeout? The situation looks promising. At the same time, we know that crypto is volatile, and putting money into it (especially for people with little experience) will always pose a specific risk. However, if we consider all the above, keep a calm mind, separate facts from emotions, and follow one of the leading investor rules, – invest what you can afford to lose, – the benefits of buying crypto in 2021 might be substantial.