Bitcoin can be considered the world’s best-known cryptocurrency.

Today is the 21st of November, 2020 and coincidentally, Bitcoin supply is also capped at 21 million.

Bitcoin recently went above $17,000 and is now more than four times its price back in March 2020 when it was below $4,000. In fact, as of the time of this writing, Bitcoin’s price is nearing $19,000.

At its essence, Bitcoin is a computer file that can be stored in what we call a ‘digital wallet’ in our smartphone or computer.

It was created back in 2009.

Every single transaction is recorded in a public list called “blockchain”.

As of now, Bitcoin is not illegal in many countries around the world.

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Why Do People Invest in Bitcoin

Bitcoin supply is limited at 21 mn.

And the view is that due to its scarcity, there will be an innate value to it.

Which can potentially be a shield to inflation – and an alternative to gold.

So the narrative today, is that Bitcoin could be an inflation hedge.

Paypal has recently started letting its users buy, hold, and sell using Bitcoin.

This could potentially be a sign of more mainstream acceptance of Bitcoin in the future.

One of the advantages of cryptocurrencies is the fact that they can be more efficient to transfer than using money.

And with cryptocurrency, there will be no need for involvement from third parties such as banks and there is also no regulatory oversight by governments.

Hence, future potential more mainstream acceptance of Bitcoin, potential hedge to inflation (alternatives to Gold), and the efficiency of the system are a few of the bull cases surrounding investing in Bitcoin in 2020.

But What Are Some of The Concerns To Investing in Bitcoin For Me?

Series of cyber hacks like in 2019 where $32 mn was stolen from Tokyo cryptocurrency exchange are one of the concerns surrounding the security of some exchanges to hacks. 

I acknowledge that Bitcoin is limited in supply at 21 million.

A question that I have in mind is: If something is limited in supply – does that always mean that there is value to it?

The current value of Bitcoin comes from demand.

Right now, Bitcoin has plenty of demand worldwide – and they have been having good demand for a number of years now.

However, will the demand sustain even after all 21 mn of Bitcoin are mined?

That is the golden question for me.

Because as with anything in this world, for example, a limited supply of painting can be valuable or not – does not simply come from the fact that they are limited in supply, they have to have the longevity and sustainable demand aspect into it as well.

And for me, right now my certainty that Bitcoin hype will persist say 5 to 10 years down the road is still a question mark.

Also read: Is SIA Shares Worth Buying? Here Are My Thoughts (August 2020)

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