Does Bitcoin Benefit the Average Person?
Bitcoin has captured many people’s attention lately following its price surge. Initially, some people ignored the cryptocurrency, thinking it was a passing cloud. However, its value increased significantly, especially during the COVID-19 pandemic, while most conventional assets plummeted. Consequently, more people looking for alternative investments now consider Bitcoin.
But does Bitcoin matter to an average person? Why would you invest in it instead of a conventional asset? This blog post explains factors influencing the benefits an average person can get from Bitcoin.
Timing
Bitcoin price fluctuates rapidly and widely. It can fluctuate significantly within a short period. For instance, this cryptocurrency’s price increased from $1,000 to almost $20,000 in 2017 before dropping to approximately $3,000 in 2018. Between 2020 and 2021, Bitcoin price rose, reaching an all-time high value of around $68,789 before dropping again. Therefore, the average person’s benefits from investing in Bitcoin will depend on their timing. If you buy low and sell high, you can make significant profits. However, predicting Bitcoin’s future performance is challenging, meaning investing in it is risky.
The Amount You Invest
You’ve heard countless times to start investing in Bitcoin with a small amount and increase as you master the market. The logic is that if you make a mistake, leading to significant losses due to cryptocurrency volatility, you can proceed as if nothing happened. However, the amount you invest in Bitcoin will also influence the returns you can make if you succeed.
Many experts rate Bitcoin as one of the fastest-growing digital investments. The number of people signing up on platforms like the Wealth Forge AI is increasing. This cryptocurrency captured many people’s attention after hitting an all-time high value of over $68,000 per coin during the COVID-19 pandemic. However, its volatility makes investing in it risky. That’s why experts recommend starting with a small amount and increasing your investment as you master the market.
Market Conditions
Bitcoin’s value fluctuates in response to market conditions. Since it’s a decentralized digital asset, governments, banks, and other centralized authorities don’t control or regulate it. Instead, supply and demand are the primary determinants of Bitcoin value.
However, this cryptocurrency also responds to investors’ and traders’ sentiments. A single comment by an influential person can significantly influence the Bitcoin price. For instance, a single tweet by Elon Musk some years ago affected Bitcoin’s price negatively. Therefore, an average person must pay attention to market conditions to benefit from trading or investing in Bitcoin. Being attentive enables them to determine the most appropriate time to purchase or sell their tokens.
Cryptocurrency Knowledge
Bitcoin has many uses besides trading and investing. Satoshi Nakamoto introduced it as a digital currency or alternative to the conventional payment system. The goal was to introduce a system without a central regulatory or controlling authority. As a currency, Bitcoin facilitates fast, low-cost transactions. Also, its underlying technology makes its transactions secure and transparent. Knowing various ways to use Bitcoin can benefit an average person. For instance, an average person can save money by using Bitcoin to transact internationally, avoiding the fees intermediaries like banks charge. Also, they can use it to receive remittances from relatives in foreign countries.
Final Word
Most average people, especially in developing countries, refrain from participating in economic activities due to the limitations of conventional payment systems. For instance, traditional banks have many bureaucracies that average people go through while accessing loans and other financial services. Also, some governments print excessive fiat money, lowering their purchasing power, which affects the average person. Bitcoin’s decentralization makes it immune to manipulation by governments and banks. The average person can benefit from trading or investing in Bitcoin by timing when to invest. Also, investing the correct amount, researching the market, and monitoring market conditions can help an average person benefit from this cryptocurrency.
