7 Reasons to still buy Bitcoin in 2021

After breaking the $20,000 barrier in December 2020, Bitcoin has gone on to reach unprecedented heights this year, trading at over $60,000 per coin in April.

In many ways, this ride to the top has been different from 2017 because the cryptocurrency has received substantially more institutional and mainstream interest this time around. We have seen Fortune 500 companies like Paypal and Venmo allow their millions of users to pay, buy, sell and hold crypto on their platform, while publicly traded companies have started to add bitcoin to their balance sheets.

Nonetheless, many newcomers feel it may be too late to buy bitcoin given its meteoric price increase to date. However, that is (most likely) not the case. In this article, you will discover seven reasons to still buy bitcoin in 2021. 

 

Bitcoin Adoption is Soaring Globally

A lot of people are more aware of bitcoin and willing to use it. It’s not just the price of bitcoin that is skyrocketing; the number of bitcoin wallets and transaction volumes have risen as well.


One of the popular crypto platforms, Blockchain.com, has witnessed a consistent rise in the number of people creating a crypto wallet, with more than 50% growth in the last year.

 

There are also numerous platforms making it easy to onboard retail and institutional buyers. Now that bitcoin has become mainstream, the potential for new investors is immense, especially as institutional investors have started to open up to the idea of diversifying their portfolios with bitcoin. 

 

If that demand from accredited investors and corporate treasuries continues to grow, it could result in another spike in prices as historical data indicates.

Bitcoin is Now Recognised as a Reserve Asset

One of the most important reasons to still buy bitcoin is that many popular companies you know are also buying right now.

 

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At the time of writing, 23 public companies with a combined total of 178,343.94 BTC are listed on bitcointreasuries.org, a website that curates the Bitcoin holdings of companies and governments. 

 

One of the prominent members of this club is Tesla. They invested $1.5 billion in bitcoin (BTC) and said it would also allow users to buy a Tesla car with the digital currency.


Another public company, Microstrategy, bought $425 million worth of bitcoin late last year, and now represents the company’s main reserve asset.

Wall Street Has Gone Crypto 

Grayscale Investments led the charge in 2013 to offer Wall Street the ability to invest in crypto. But now, there are many options available. 

 

With the strong bitcoin performance last year, many Wall Street analysts are now advising their clients to have bitcoin as a holding in their portfolios. Many financial firms have also added bitcoin investing as part of their strategy to attract a new class of investors.

 

Arguably, the biggest news that made bitcoin even more attractive was when the largest US crypto trading platform, Coinbase, went public. Coinbase’s listing on the US stock exchange, Nasdaq, was hailed as a major success. On the first day of trading, it became more valuable than the two biggest US stock exchanges.

 

Additionally, Canadian authorities have authorised the trading of four Bitcoin ETFs on the Toronto Stock Exchange (TSX), and the US Securities and Exchange Commission are considering a Bitcoin ETF for the US stock market. 

 

With Wall Street firms and traders getting into bitcoin in large droves, there’s no telling how much potential price upside bitcoin has in the future.

Bitcoin Acts as a Great Diversification Asset in Today’s Economic Climate

Bitcoin has been shown to have low correlation to traditional assets. Portfolio managers often advise having a diversified portfolio, which means ensuring you have a cross-section of uncorrelated or negatively correlated assets to de-risk your investment portfolio. 

 

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According to a study by Yale economist Aleh Tsyvinski, investors can have 6% of their portfolio in bitcoin to have an optimal portfolio. Historically, bitcoin has shown greater potential for return, despite its high volatility.

 

Like we mentioned above, even publicly traded companies are diversifying their balance sheet by adding bitcoin. Individuals can do this also to get exposure to bitcoin and reduce risk during these times, where the global financial economy is unstable.

Bitcoin Acts as a Store of Value

Why Nigerian Crypto traders are looking to P2P exchanges

Nigeria reportedly accounted for the second-biggest bitcoin trading volume on peer-to-peer global trading platforms. 

 

The reason for this isn’t far-fetched. There’s been growing instability around the Nigerian naira. The currency was devalued twice in 2020 alone, losing almost 50% of its value. This has created a practical use case for holding bitcoin in Nigeria. 

 

The Nigerian government has also taken to money printing, which means the mass supply of the currency could continue to drive up inflation in the country. But the Bitcoin protocol has a hardcoded limit of 21 million coins, which creates scarcity and a deflationary monetary framework.

 

With major uncertainty in the monetary policy of the Nigerian government, it could mean many Nigerians would continue to prefer to keep their money in bitcoin to preserve value. 

Developers Are Continuously Improving Bitcoin 

Like all technologies, Bitcoin is constantly evolving and updated for better user experience. These changes would play a significant role in Bitcoin’s long-term value proposition. There’s consistent work on improving the functionalities, such as creating sidechains or solving compatibility issues. There’s also steady work on squashing minor bugs.

 

It might surprise you that Bitcoin technology is still being upgraded and improved. The more upgrades are done on a technology, the more resilient it becomes. And for Bitcoin, there’s transparency on what’s been fixed and updated. 

 

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The Bitcoin network is open source, which means anyone can suggest changes to it. But for a suggestion to be implemented, it requires consensus on the network.

 

For example, a developer community created what is called Lightning Network, which allows users to send bitcoin faster and cheaper off-chain. This feature has helped make the Bitcoin network even more valuable. There are other upgrades in the pipeline that could help drive even more value for bitcoin in the near future.

Bitcoin Remittances Are on the Rise

Bitcoin isn’t just for Wall Street or to diversify your investment portfolio. It has also gained massive popularity as a cost-effective way to send international money transfers.

 

In Nigeria, Bitcoin remittance has become such a big deal that it’s making Nigeria’s central bank worry about Nigerians choosing it over the naira. The central bank now pays Nigerians to use naira for remittance to incentivise people to switch back.

 

For diaspora Nigerians who send money home frequently to support their families, the cheap transaction costs of bitcoin remittance apps eclipse the exorbitant transaction fees of traditional cross-border transfer companies like Western Union and MoneyGram. 

 

Bitcoin cross-border transfers bypass all the legacy infrastructure that slows down transactions and makes transfers costly. 

 

An example is Cryptofully, which uses Bitcoin to enable fast settlement and low fees. It uses a digital peer-to-peer network enabling it to convert transfers into naira and settle directly in a recipient’s Nigerian bank account.

 

So, if you want an easy and cheap way to send money to Nigeria, more reason to consider buying bitcoin in 2021. If you want an easy-to-use bitcoin wallet to get started, download Cryptofully.

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