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Bitcoin (BTC): Everything you Wanted to Know before Investing!

Bitcoin’s (BTC) price has increased astronomically in the last few years. There are hardly any people who haven’t heard of it. But not everyone knows about it. In this article, I’ll try to explain what it is, how it works, what its price currently is, what will be its price after 5-to-10 years, and should you invest in it now. 

What is Bitcoin? How do Bitcoins Work?

Bitcoin (BTC), the first decentralized cryptocurrency and also the largest in terms of market capitalization, uses public-key cryptography for recording, signing, and sending bitcoin transactions over its own blockchain. 

The Bitcoin network was launched by a person or a group of persons under the pseudonym “Satoshi Nakamoto” on January 3, 2009. Its first white paper was published back in 2008. Currently, Gavin Andresen is the lead developer for a part of the bitcoin digital currency project, who is relentlessly trying to make BTC a secure and stable “cash for the Internet” or peertopeer electronic cash system.

This network is a peer-to-peer electronic payment system, which uses bitcoin, a native cryptocurrency, for:

  • Transferring value over the internet, or
  • Act as a store of value (just like precious metals such as gold, silver, etc.)

Bitcoin or other cryptocurrencies don’t exist physically. Bitcoin is a digital currency whose value is transacted between the sender and receiver directly. 

The best thing about the Bitcoin network is that the transaction of bitcoin (BTC) between the sender and receiver takes place on a peer-to-peer basis, no intermediaries such as banks, are involved in facilitating the transaction. Everything related to this transaction takes place through blockchain technology, which is a distributed ledger technology, immutable, and transparent. Bitcoin network is challenging the centralized banking system.

bitcoin (BTC): Native Token of the Bitcoin Network

The native coin of the Bitcoin network is denoted as BTC. 1 BTC is not the smallest unit of bitcoin. The smallest unit is called satoshi. 1 BTC = 100,000,000 satoshis. This means, 1 unit of bitcoin or BTC can be divided up to eight decimal places. 

The price of bitcoin currently (as of September 30, 2021) is US$43,486.95. This means, 1 satoshi is equal to US$ 0.0004348695. You can buy 0.000023 BTC or 2,303 satoshi for US$1. 

Does bitcoin have any Store of Value?

Whether bitcoin (BTC) has a store-of-value function or not is debated. Its proponents say that one of the main functions of bitcoin is its decentralized store of value, providing ownership rights as a physical asset or as a unit of account. Some say that the anti-inflationary nature (thanks to the upper limit of BTC coin supply at 21 million bitcoins) of bitcoin is the main reason why more and more people ( retail investors, institutional investors, venture capital, corporate finance, etc.) are investing in it. 

At a time when the interest rate is hovering closer to zero, geopolitical uncertainties prevail, and the strength of the US Dollar remains weak, more and more investors will find bitcoin attractive. In the last 8-years, since May 2013, the price of BTC has increased from around US$100 to an all-time high (ATH) at US$64,863.10 (on April 14, 2021) and the current price at around US$43,486.95. 

  • If we consider the ATH, the price has increased 650-folds in the last 8-years. During 2013-2021 (8-years), the ROI (Return on Investment) from BTC was an astronomical 64,763%. 
  • If we consider the current price, BTC’s price has increased by over 400-folds in the last 8-years. During 2013-2021 (8-years), the ROI (Return on Investment) from BTC was an astronomical 43,386%. 

Even the naysayers believe that the high-scale adoption of the top cryptocurrency will make bitcoin a true store of value. In fact, more and more institutional and corporate investors are realizing its store value and increasingly investing their funds in bitcoin. 

  • Asset managers, led by Grayscale Investments, currently hold around US$70 billion worth of Bitcoin. 
  • Corporate investors such as MicroStrategy and Tesla Inc (led by maveric entrepreneur Elon Musk) are the leaders in cryptocurrency investment. 

Soros Fund Management and other behemoths have also started trading BTC. Ark Invest CEO Cathie Wood has predicted that the price of each bitcoin will reach US$500,000 in the next 5-years. She assumes that the institutional investors will allocate 5% of their funds to it. Reports say that the bitcoin price will get a further boost after the SEC (US Securities and Exchange Commission) approves bitcoin futures ETFs in October 2021. 

In fact, the adoption process has already started with El Salvador as it adopts bitcoin as legal tender. This country has already made BTC their legal currency besides US Dollar. Panama and Ukraine are also on their way towards making the same move. There are many companies that have already started to accept bitcoin as payment such as Microsoft, PayPal, Overstock, Whole Foods, Etsy, Starbucks, and many more. This means that the process of mass adoption has already started and it will further pave way for BTC to become a store of value. However, bitcoin legal status is not secure in some countries. Analysts believe that these hindrances will go away in the coming years.

Therefore, you can invest in BTC now and hold on for the long term, say, 5-years, 10-years, or more to witness an explosive growth of your investment. 

Bitcoin BTC Coins: Facts & Figures

All these facts and figures will help you to make a decision on investing in BTC:

  • BTC cryptocurrency current price: US$42,191.04 (as of Sep 29, 2021)
  • Trading Volume (24h volume): US$30,353,185,037
  • All-Time High (ATH) Price: US$64,863.10 (reached on Apr 14, 2021)
  • All Time Low (ATL) Price: US$65.53 (reached on Jul 05, 2013)
  • 24h Low: US$40,829.67 (as of Sep 29, 2021)
  • 7d Low: US$40,848.46 (as of Sep 29, 2021)
  • YTD (Year-To-Date) Return: +42.96% (Jan 1, 2021 to Sep 29, 2021)
  • Market Cap: US$794,437,741,111
  • Crypto Rank (in terms of market cap): 1
  • Fully Diluted Market Cap: US$886,011,831,482
  • Max Supply: 21,000,000
  • Total Supply: 18,829,537
  • Circulating Supply: 18,829,537.00 BTC (90%)

Is Bitcoin Safe to Buy? Can you Lose Money on Bitcoin?

Bitcoin price is highly volatile in nature. Though it has given +4000% growth in the last 8-years or long term, many short-term investors have also made huge losses. This is mainly because a 10% fluctuation on a daily basis is considered normal in the cryptocurrency market. 

In the last few months (April-July 2021), the price of each BTC has dropped from US$60,000 to US$30,000. However, it is also true that since January 2021, the BTC price has increased from below the US$30,000 level to an ATH at just below US$65,000. 

However, in the long run, say last 5 years (2016-2021), the price has increased from US$400 to over US$43,000 currently, a price jump of over 107-folds. This means that your investment will increase significantly if your HODL bitcoin is in the long term. You should invest in BTC in the short term only if you are a pro-investor with ample knowledge of technical and fundamental analysis as well as lots of investing experience. 

Dan Herron, a CFP with Elemental Wealth Advisors in San Luis Obispo, California, said:

“Understand that these are very volatile investments, so if big fluctuations cause you to lose sleep, this isn’t the space for you.”

In case, you are looking for “safe” investment assets with guaranteed returns, Bitcoin or other cryptocurrencies are not suitable for you. Instead, you should settle for fixed return assets providing you with a guaranteed 4-5% APR. 

Can you get Rich in Bitcoin?

Yes, you can become rich by investing in bitcoin, if you are ready to shoulder the risk that comes with it. If you invested US$1,000, 5 years back then your investment could have increased by 107-times till now to more than US$1,07,000 currently. This means that you should hold on to BTC for the long term to experience exponential growth in your return on investment. Experts believe that in the coming 5-to-10 years (2025-2030), the price of each BTC will reach anywhere from US$500,000 to US$1-million (US$1,000,000). 

Where Can You Buy Bitcoin BTC?

You can buy BTC in almost all reputed cryptocurrency and bitcoin exchanges including:

  • Coinbase Pro
  • Huobi Global
  • Binance
  • Kraken
  • OKEx
  • Bitfinex, and many others.

You can use credit cards, debit cards, or bank account transfers to fund your cryptocurrency trading or investing account in a leading cryptocurrency exchange. 

What are the Best Cryptocurrency Wallets to Store Bitcoin (BTC)?

The best Bitcoin wallets to store bitcoin BTC are:

  • Trezor Model T
  • Ledger Nano X
  • Ledger Nano S
  • Exodus
  • Mycelium
  • Electrum

Cold storage such as Trezor Model T, Ledger Nano X, and Ledger Nano S are considered the most secured wallets for storing BTCs. Paper wallets are also considered secure. The most popular pair traded in these crypto exchanges is the bitcoin USD pair.

Invest in bitcoin BTC and Other Cryptocurrencies

You can buy and sell bitcoin BTC and other cryptocurrencies against various fiat currencies (US Dollar USD, British Pound, Canadian Dollar CAD, South Korean WON, Singapore Dollar, Chinese Yuan, Hong Kong Dollar, etc.) through a wide array of crypto exchanges (centralized or decentralized exchanges) and crypto APIs. Use Dollar Cost Averaging DCA strategy to invest in cryptos to minimize the risks associated with high volatility. 

If you want to increase your investment explosively in the coming 5-to-10 years, buy crypto coins now. Keep an eye on the market news, price statistics, block times, blockchain news, and others to time your trading of Defi protocols and tokens for maximum profit. 

You can also diversify your crypto coin portfolio by including other cryptocurrencies such as BTC, AAVE, Ripple XRP, Bitcoin Ether ETH, Bitcoin Gold (also called Bit Gold), Bitcoin Cash BCH, Basic Attention Token, Ethereum Classic, Binance Coin, Wrapped Bitcoin (some also call it wrap bitcoin or wBTC), USD Coin, Gemini Dollar, ERC20 tokens (created on Ethereum blockchain), nonfungible tokens NFTs, and others. 

Also, invest in various types of stocks, mutual funds, index funds, real estate, and others to improve your personal finance. If possible, get help from a portfolio manager or wealth management firm for maximum return. 

Invest in NapBots: A Dynamic Cryptocurrency Index

Whether you are a professional or retail investor, you can expose your capital to a diversified portfolio of digital assets & crypto asset classes by simply investing in NapBots. It is a smart crypto index service that introduces multifarious features and passive portfolio management strategies for enabling cryptocurrency investors to streamline their trading experience in new ways. 

NapBots provides you various indices that include a basket of tokens with high market capitalization and are categorized by theme (such as Solana, NFT, DeFi, and others). This platform introduces an intuitive interface as well as advanced allocation tools for enabling new investors to create and manage advanced crypto indices easily.

The best part of NapBots is that it tracks and executes trades automatically on the basis of your pre-set choices of indexes. The platform is very affordable as it enables you to start trading as low as US$150 with a monthly service fee of just 2.5%, which is far below the current rate of other cryptocurrency index providers. Therefore, NapBots reduces the financial barriers and at the same time eliminates the need for human intervention and the consequent human error. 
Get started with crypto-asset investing by investing through napbots.com, a dynamic crypto index for expanding diversified exposure to bitcoin and leading crypto-assets at reduced financial barriers and no human error.