The Trending Cryptocurrency to Stock Up on During This Crypto Winter
2022 has not been friendly to cryptocurrency. So far this year, Bitcoin has lost over 50% of its value. Many smaller coins are down even more. As prices tank, many major crypto funds are being forced to liquidate. Even worse, some cryptocurrency companies are being sued for fraud. However, despite all this turbulence, there is still one relatively safe crypto that you can invest in. Let’s examine why Bitcoin is the one trending cryptocurrency that’s worth stocking up on during this crypto winter.
Trending Cryptocurrency: Bitcoin as a Store of Value
Bitcoin is a decentralized digital currency that can be transferred on the peer-to-peer bitcoin network. However, to understand what makes Bitcoin so valuable, we need to stop looking at it as just a currency. In addition to being a medium for exchange, Bitcoin is also the most immutable store of value ever created. By “store of value” I simply mean a way for people to store the wealth that they create for themselves. This is another crucial component of what makes Bitcoin so valuable.
Up until the creation of Bitcoin, fiat money and gold were the two most common stores of value. But, they both have major problems. Fiat money is valuable as a medium of exchange. However, it loses its value over time due to inflation. If you were to hold U.S. dollars for the next 100 years, they would probably lose around 90% of their value by the time we reached the year 2122.
On the other hand, gold has historically been used as humanity’s main store of value. It has served this purpose fairly well and its price tends to increase over time. This with why the market for gold is currently around $11 trillion.
However, Bitcoin has a few key advantages over gold as a store of value. This is what makes Bitcoin’s long-term potential so intriguing. It is also why Bitcoin is practically always a trending cryptocurrency. Let’s examine what makes Bitcoin so unique.
Bitcoin has a capped supply of 21 million coins. This means that there will only ever be 21 million Bitcoins in existence. Compare this to U.S. dollars, where billions of new dollars are printed each year. Even the supply of gold is constantly increasing with each passing year.
This capped supply is crucial because it gives investors faith in the asset. Any freshman-year econ student knows that increasing a good’s supply will reduce its price. Bitcoin investors don’t need to worry about this.
Bitcoin was founded by the mysterious Satoshi Nakamoto. This is a pseudonym for a person or persons unknown. The fact that Bitcoin has no founder essentially means that there is nobody “in charge” of it. The network operates on its own and it cannot be controlled by one single organization.
It’s similar to how nobody is in charge of the internet. Sure, there are major companies like Google or Facebook that contribute a lot to the internet. But, the internet would continue to exist and thrive even if these companies went out of business.
For Bitcoin, the fact that there is no founder gives investors the comfort that no one will ever change it. Keep reading for more on trending cryptocurrency.
As a means of storing wealth, Bitcoin is the best. This is because it is entirely digital. You can easily store billions of dollars on the internet or a hard drive. On the other hand, storing $1 billion dollars in cash would require a storage facility, transportation and extensive security. This is even more true for storing $1 billion worth of gold.
Thanks to its digital nature, Bitcoin is also easily transported. All it takes is the click of a button to send money anywhere in the world. Again, this is an advantage that’s unique to Bitcoin. Even sending dollars digitally requires a bank, high transaction fees, and a few days for the transaction to process.
There are a few more things that make Bitcoin unique. But, by now, I hope you’re starting to see why investors love Bitcoin. There has never been another asset like it. While other crypto assets come and go, Bitcoin has remained the industry leader.
Why is Bitcoin Constantly a Trending Cryptocurrency?
By this point, the cryptocurrency industry is over a decade old. For better or worse, the industry has expanded rapidly. Today, there are over 18,000 cryptos. But, of these coins, how many can you name? Maybe 10 or 20? Even if you can name 100, that’s less than one percent of all existing cryptocurrencies. Comparatively, nearly everyone has heard of Bitcoin. Why is it that Bitcoin is always a trending cryptocurrency?
Again, it comes back to the immutable characteristics of Bitcoin that I listed above. Many other crypto projects, while they may have other benefits, don’t have the same traits as Bitcoin.
For crypto beginners, it’s easy to assume that all cryptos are fairly similar. However, comparing Bitcoin to something like Dogecoin is like comparing the U.S. dollar to monopoly money.
Of course, that’s not to say that Bitcoin is perfect. Many have criticized Bitcoin for its potential as a tool for laundering money. Bitcoin also requires a massive amount of energy to run, which is a major environmental concern. However, the future for Bitcoin still looks incredibly bright. So, does all of this mean that you should buy Bitcoin?
Should you Buy Bitcoin?
This depends on your personal financial goals and risk tolerance. Although the long-term potential of Bitcoin is strong, its price still incredibly volatile. This is especially true in the short term. As we’ve seen this year, Bitcoin’s price has crashed from $47,000 down to under $20,000 in a matter of months. It’s entirely possible that this freefall will continue. For this reason, I would not recommend buying Bitcoin with any money that you’ll need in the immediate future.
Additionally, there is no telling how long it could take for Bitcoin to become widely adopted. It could happen in the next five years. But, it could easily take another 100 years. This is another risk to consider. With that said, if you are looking for a trending cryptocurrency that doubles as one of the most secure stores of wealth ever created, then Bitcoin is your answer.
I hope that you’ve found this article on the best trending cryptocurrency to be valuable! Please remember that I’m not a financial advisor and am just offering my own research and commentary. As usual, please base all investment decisions on your own due diligence.