Name Price24H (%)
Bitcoin (BTC)
$22,421.00
0.89%
Ethereum (ETH)
$1,566.33
0.43%
XRP (XRP)
$0.370135
-1.17%
Litecoin (LTC)
$90.16
1.54%
Bitcoin, Featured

The Case for Bitcoin as a Long-term Investment Asset

Long-term investments refer to those kinds of investments that can range from seven to ten years of holding time. Sometimes long-term investments may extend up to 30 years, though there is no fixed rule or criteria. From the perspective of customers, mutual funds, fixed deposits, and exchange-traded funds (ETFs) can be both short-term and long-term. Bitcoin being a cryptocurrency till now is a short-term investment asset, but there is a high possibility that it may become a long-term investment asset. These are the following reasons why such a possibility exists.

The value of Bitcoin Is Poised To Appreciate

In recent times, several external factors have favored the rise of Bitcoin and caused its value to appreciate significantly. The inflows to the Bitcoin ETF emerged as a big player on Wall Street to market products. The production rate in April 2024 may decline by 50%. There is an upsurge in demand because of wealth transfer to the younger generation. This will have a cyclical effect on the crypto economy and compel many investors to invest for longer durations. 

Due to appreciation, there is a fair possibility that Bitcoin will become a vital asset to build infrastructure in many countries of the world. The financial system will boost investor demand and push the crypto to a valuation of a few thousand dollars. This in turn will help in giving investors more leverage to buy bitcoin and use it for long-term investment.

Dedollarization and Erosion of Trust

The American dollar is still the main reserve fiat currency of the world. This is because a large majority of international volumes are transacted in dollars. However, this is going to change soon because the world is moving towards a multipolar political settlement. There is a high possibility that the American dollar may soon lose its predominance in global trade. 

The dedollarization campaign has significantly eroded the trust levels of the American dollar after the Russian invasion of Ukraine. When Russian assets stored in American dollars were seized, the trust levels for American dollars went downhill. Many countries no longer trust the American dollar and are seeking suitable alternatives. Some are contemplating to promote their respective national currencies. The whole world is looking for assets that can be resistant to abrupt seizures. In this regard, gold and cryptos like Bitcoin have the potential to act as a long-term investment asset. 

Bitcoin has a better chance of becoming the leading long-term investment asset because of its high speed of transferability, unlike that of gold. For example, if tomorrow, the US dollar loses its majority status as the world most countries will want their national currencies to replace the American dollar. As a result, there may be serious difficulties in reaching a consensus. In such a scenario, Bitcoin can play a crucial role because it suits all countries and is politically neutral.  Though oil and gold also have international acceptability, both these suffer from quick transportation and divisibility problems. Therefore, unlike oil, and gold, Bitcoin has better chances to become a full-fledged global currency for international trade.

Decentralization Feature of Bitcoin

Bitcoin is undoubtedly the most popular cryptocurrency in the world. The decentralization features today hold great importance especially when the US dollar is facing considerable opposition. Unlike the US dollar, Bitcoin has no centralized authority and can be traded all over the globe. Interestingly, Bitcoin is convertible into any national currency. It is far easier to store, and transfer. 

Also Read- Memeinator’s Crypto Presale Sparks Wild Frenzy Among American Investors!

Bottom Line

The present trends indicate that Bitcoin’s importance and value will grow substantially. There is a fair amount of possibility that Bitcoin may well become the global currency for trade and commerce. Consequently, it may become a suitable long-term investment option after a few regulations. Reliability, popularity, and stability are three features that are enough to attract investors of all hues. 

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