Investing in Bitcoin can be a complex and challenging endeavor. It's essential to approach it with caution, thoroughly understanding the risks and potential rewards, before investing in bitcoin first you have to define your investment objectives and time range of the investment, your investment strategy is it long term or short term are you investing to sell or to hold all these are considerations needed to be considered before investing
People who invest in Bitcoin are basically investing in Bitcoin for the long term. You should note that Bitcoin investments are only made by those people who live in the modern world today.
Those who deposit money in banks get low interest rates but the money is not deposited with them, it is owned by a third party. But Bitcoin is the only coin that is currently in circulation all over the world. If you invest in Bitcoin instead of keeping money in the bank, then you will get more benefits here and you will not have a third party as the owner of your money.
You are depositing money in the bank month after month but you get 4 to 5% interest rate, but if you invest that amount of money in Bitcoin, then you will be ready to get double the amount of your money if your investment is long-term.
So you think, I see more complications in banks and there is risk in it, but in comparison, Bitcoin is not risky and the money will be available to you. I do not see any complications in investing in Bitcoin, only you have to have the ability to take risks.
I agree with your opinion. As a newbie, I have also learned a few things about this topic that I would like to share. I hope you will point out any gaps or errors in my understanding, which will be beneficial for me.
If someone is interested in long-term investments and seeks protection from inflation, I believe Bitcoin is the best option. This is because the annual interest rates provided by traditional banks are often lower than or only slightly above the rate of inflation. When inflation surpasses the interest rate on deposits, the real value of savings decreases over time.
To understand this better, it can be explained as follows:
Subtract the inflation rate from the nominal interest rate to get the real return. For example, if the deposit interest rate is 3% and the inflation rate is 4%, the purchasing power decreases by -1%.
The primary reason for inflation is the uncontrolled printing of fiat currency. On the other hand, the supply of Bitcoin is limited (21 million), which cannot be increased arbitrarily. As a result, scarcity is created, and due to this scarcity, the value of Bitcoin tends to increase significantly (e.g., 50%), which can surpass inflation.
Bitcoin's decentralized nature and anti-inflationary design protect it from inflationary pressures. However, long-term investment in Bitcoin tends to yield better results.
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