This is a guest post submitted on CryptoTapas.
The concept of inflation can be explained by considering two factors: the currency has increasing supply, or the demand for respective currency is low. In both these cases, the circulation of currency will be higher; as a result, the prices of services and goods will also go up. When we talk about national currencies, the central banks are responsible for causing inflation.
Now some of you might be wondering why experts recommend investing in bitcoin to deal with inflation. Well, it is true that investing in bitcoin is the best way to protect yourself against volatility of fiat currency. Actually, bitcoin does not have any inflation model; and this is why it is not recognized legally by most of the governments.
It is important to mention that Bitcoin has a maximum 21 million coins and they are hardcoded into the source code of this currency. Assuming that bitcoin demands keep on rising from current levels, this currency can work as a potential safeguard against inflation. But for this to come true, it must be adopted by almost every person on this planet so that momentum stays high.
Below we have listed Top 10 reasons why bitcoin is the best hedge against inflation; it will help you to make an easy decision for making investments in this cryptocurrency:
1. High adoption rate
When compared to other cryptocurrencies in the market, bitcoin has the highest adoption rate. It has proven its credibility in the market; most of the big commercial giants like Apple and Amazon are also accepting blockchain technology with time. By looking at its exponentially rising adoption rate, most South American countries such as Venezuela, Peru, Colombia, Chile, and Argentina, etc have raised their trading volumes for bitcoin.
2. Optimism in the bitcoin market
Popular professionals like John McAfee and Chief Commercial Officer at Bitpay, Sonny Singh, are also supporting rise of Bitcoin industry. Other than this, ex-strategist at JP Morgan, Tom Lee and founder of Galaxy Digital, Mike Novogratz are also optimistic about success of this currency. Many big business owners and celebrities are investing in bitcoin, and it has increased the hope for higher momentum and sustainability of this currency.
3. High liquidity
Bitcoin has now entered the journey of high liquidity, and it is probably the best time to invest in this currency. Even if you start with lowest investment, it can provide you great returns in coming years. If you don’t invest, you will probably regret. Predictions reveal that Bitcoin will reign very high in the coming five years and the profits may even go beyond your imaginations. It is really good to make investments now, and it will bring huge returns in the near future.
4. Decentralized system
Another biggest reason for considering bitcoin as a major hedge to fight against inflation is its decentralized payment system. There is no third-party involvement in monitoring bitcoin transactions. Users have their own wallets that they can manage by their own while enjoying instant transfers of digital currency. You are free to take your own decisions as per market ups and downs; no government body can interfere in your payments. Moreover, it maintains higher transparency level.
5. Fastest transactions
Bitcoin blockchain and its lighting network allow fastest transactions online and that too at low fees. Moreover, they offer higher technical security so that your funds stay safer online. This feature ensures the longevity of BTC blockchain. When people are able to send and receive money at faster rate, it will naturally lead to a financially more independent and secure world. As a result, people will automatically find more ways to deal with inflation.
6. Regular developments
You will be happy to hear that the bitcoin network is not a static development. The developers keep on making changes to this system to ensure higher scalability and better features. It can help you to maintain your money online with innovative and secure system. Such systems can ensure more sustainable growth of the individuals and businesses as well. Hence, providing best ways to deal with inflation.
7. Good for institutional investors
With the huge growth in the cryptocurrency market, we have already stepped into the world of highly secure and well-regulated Bitcoin exchanges. The first most exchange for this popular digital currency was GBTC Bitcoin, and then it was included to ETN Bitcoin Tracker. Recently, BTC was also added to CME and Cboe. The chances are that soon; it will become an integral part of institutional investments.
8. The demand is rising
Bitcoin has now gained huge popularity in the market, and the demands are also rising with each passing day. As people are becoming aware of it’s potential, they are making potential investments. Now, with the increase in demand, value of this currency will also increase, and it will definitely return fairly good amount to the investors. Naturally, it is proven to be the best asset against inflation.
9. Bitcoin is portable
It is possible to carry billion dollars wealth in the form of bitcoins without even facing any trouble across borders. Storing physical gold at multiple locations can put you into risk, but Bitcoin will never. You can trust this currency to ensure long term profits. Also, it becomes easier to spend as compared to gold. You can easily make transactions from person to person. Many big companies are even ready to accept payments in the form of Bitcoin for their goods and services. With this, people find it easier to rely on Bitcoin to ensure sustainable future growth.
10. It is censorship-resistant
A few years back, Executive Order 6102 announced it a criminal offense to own or trade gold in U.S. The free movements for Gold became possible only after 1975. But you cannot face such issues with Bitcoin. This is designed with a censorship-resistant model so that people can rely on it even during tough times. It offers safe and secure transactions without worrying about any third-party involvement.
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