The world’s top cryptocurrency is smashing all times highs with a record price of over $50,000! The question on a lot of people’s mind is whether it’s now too late to start investing in Bitcoin.
I’ve been harping on about Bitcoin and cryptocurrency since I first discovered it back in 2017. In this article I’m going to share my thoughts on whether you should still buy Bitcoin, or if you’ve missed your golden opportunity.
Bitcoin’s new all time high?
Bitcoin seems to be beating its previous records on almost a daily basis.
There’s been a lot of activity in the past few months and it feels like a lot of dominos are beginning to fall in the world of crypto.
Over the last few years the price action has been pretty quiet. However, it’s exploded recently. What’s important is that during those quiet years, networks like Bitcoin were improving so that they would be able to cope when bigger adoption takes place. Which is what we’re seeing now.
Is it too late to buy Bitcoin?
It is definitely too late to buy Bitcoin if you’re hoping for astronomical returns from a tiny investment.
It’s not too late to invest in Bitcoin if you want to diversify your portfolio with a different asset.
If demand for Bitcoin keeps going like it has been, the price is likely to go up simply due to supply and demand.
Currently the market cap of Bitcoin is around $1 trillion. Gold on the other hand has a $10 trillion market cap. So, if Bitcoin was to become ‘digital gold’ and have the same market cap, that would give each Bitcoin a price of around $500,000. This might still be a long way off but I think it’s entirely possible for Bitcoin to eventually match or even beat gold in terms of market cap.
Is Bitcoin a good long-term investment?
But if you’re looking to make quick returns, it might be best avoiding Bitcoin. The volatility is crazy and you could see your investment plummet in a matter of hours.
However, the long-term outlook for Bitcoin is looking pretty good right now. This could obviously change due to technology or even laws and regulations but as it stands it’s a promising asset.
Tesla made the news recently because they allocated $1.5 billion of their cash reserves into Bitcoin.
Just today, The Motley Fool also announced they would be buying $5 million worth of the cryptocurrency on their own balance sheet.
Companies are doing this to potentially use Bitcoin as a hedge against inflation. Lots of dollars are being printed as part of stimulus packages and this could devalue the purchasing power of cash. So people are seeing Bitcoin as a potential protection against this.
If other companies follow in these footsteps and allocate just a small percentage of their cash into Bitcoin, this is only going to increase the price further.
Should buying Bitcoin be a priority?
We’re still in the middle of a pandemic and there’s a lot of uncertainty. Buying something like Bitcoin should only be done if you’ve paid off your debts, built up an emergency fund, and are using it as a way to diversify your investment portfolio.
I think Bitcoin is going to be around to stay and I think it’s worthwhile people owning at least a little bit if they can afford too.
It shouldn’t be viewed as a get-rich-quick scheme and you’re going to get burned if you treat it like this. This is what happened to plenty of investors during the 2017/18 bubble, wiping out a lot of people.
Tread with caution but don’t be afraid that it’s too late to invest in Bitcoin. It’s not going anywhere anytime soon, and there’s still plenty of room to grow. Just be prepared for the inevitable rollercoaster and don’t invest anything you can’t afford to lose.