How Scarcity and Growing Adoption Will Drive Bitcoin Value Up
Bitcoin is still the cryptocurrency market leader commanding 38% of the entire market valuation. Despite experiencing high volatility last month, this cryptocurrency continues to exhibit high resilience, gaining value to trade at $11,206 in February 2017 just weeks after it hit a low of less than $6,000.
The value of digital assets, like Bitcoin, is continually being driven by technological advancements that facilitate virtual trading as Jameel Shariff, CEO of P2PS token notes.
“Due to the ever-growing technological advances that are briskly changing our world into a global village, Bitcoin and other major cryptos are fast becoming valuable products that are needed by end users in order to conveniently exchange their store of value to a product or service they require,” he says.
Store of Value
Due to the value it gained in 2017, many people are beginning to see Bitcoin as a store of value. The rising value of Bitcoin has made governments in G7 countries to begin considering the integration of cryptocurrencies like Bitcoin in foreign reserves.
“One of the reasons why we should invest in a Bitcoin today is because it is fast reaching a stage where it will be considered a store of value. Similar to any commodity such as a vehicle, a television or gold, Bitcoin too has fundamental value,” notes Jameel Shariff, CEO of P2PS token.
Bitcoin’s value will continue to go up and is likely to be more valuable than assets, as gold, in the next decade or so.
“The traceable amount of gold that exists globally is about 158,000 tons, which is currently valued at about $6.5 Trillion. Gold is predominantly used as value to back the reserve currencies. Since mined cryptocurrencies such as Bitcoin are being equated to gold due to their inherent characteristic of being mined in order to be made available, the intrinsic value of a Bitcoin today can be better understood. Based on usage statistics, a Bitcoin would possibly become more valuable than gold in the next decade or two,” he notes.
The ability of Bitcoin to outperform other markets and commodities also makes it ideal for long-term investment according to Pinnacle Brilliance CEO, Roman Guelfi-Gibbs.
“Bitcoin has proven to be an excellent mid to long-term investment. It has outperformed commodities and other markets by a large percentage. Market analysts including myself project further growth in Bitcoin value moving into 2019, so it would be very smart to buy on dips and project your profit targets using yearly Bitcoin historical growth rates,” he says.
Adoption and supply
Bitcoin became the first cryptocurrency to be used by some businesses as a means of payment. The digital currency is being used to make charity donations, buy household items and gift items, pay for video games, travel, and much more.
According to Eran Eyal, CEO of Shopin, this growing adoption of Bitcoin and its utilization in the mainstream market is a strong reason to invest in Bitcoin. “One should invest in bitcoin if one is bullish on the future of cryptocurrency and believes bitcoin is a store of value. Bitcoin is the first real cryptocurrency acknowledged by the market,” he says.
Further, the law of supply and demand will make the value of Bitcoin rise again. The demand for Bitcoins is on the rise yet its supply is limited. This will make it more valuable in the future as scarcity sets in.
“With only 21 million Bitcoins available and fewer currently available for mining, it can act as a limited commodity that has a variety of functional and speculative values. In any case, it would be a good diversification of your risk portfolio,” Eyal adds.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.