Despite the dangers, the cryptocurrency market and the business surrounding blockchain are becoming more robust. Investors now have a greater ability to have access to institutional-grade custodial services, as well as the much-needed financial infrastructure that is currently being constructed.
The tools that are necessary for professional and ordinary investors to manage and protect their cryptocurrency investments are increasingly becoming available to them.
Futures markets for cryptocurrencies are currently being developed, and a growing number of businesses are acquiring direct exposure to bitcoin industry. The process of buying and selling cryptocurrencies on well-known platforms like Block (NYSE:SQ) or PayPal (NASDAQ:PYPL) is getting simpler thanks to the efforts of large financial companies. Block, along with a number of other corporations, is among those that have invested hundreds of millions in Bitcoin and other virtual assets.
At the beginning of 2021, Tesla (NASDAQ:TSLA) made an investment in Bitcoin worth $1.5 billion. The manufacturer of electric vehicles disclosed in February 2022 that it had about $2 billion worth of the cryptocurrency in its possession.
Since the year 2020, the business intelligence software corporation known as MicroStrategy (NASDAQ:MSTR) has been building up its holdings of bitcoin. At the end of 2021, it had a holding of $5.7 billion worth of the cryptocurrency, and it stated that it intends to buy more using the surplus revenue that is created from its operations.
Although the riskiness of bitcoin is still influenced by various factors, the rapidly accelerating rate of adoption is indeed a sign that the market is becoming more mature. Individual investors as well as corporations are looking for ways to obtain direct exposure to cryptocurrencies because they believe it to be a reliable asset class in which to invest significant sums of money.
Is crypto a good long-term investment?
Numerous cryptocurrencies, like Bitcoin and Ethereum, are introduced to the market with high goals that may or may not be accomplished over extended periods of time horizons.
Early investors in the cryptocurrency project that achieves its objectives may be eligible for substantial financial benefits in the long run, despite the fact that the success of any one cryptocurrency project cannot be guaranteed.
However, in order for just any cryptocurrency project to be regarded a long-term success, widespread acceptance of the cryptocurrency must first be accomplished.
Bitcoin as a long-term investment
Bitcoin, as the cryptocurrency with the greatest widespread recognition, enjoys the benefits of the network effect. This means that many people want to acquire Bitcoin since Bitcoin is possessed by very people. Bitcoin is currently regarded by several traders as “digital gold,” but also has the potential to function as a sort of digital cash in the future.
Investors in Bitcoin are of the opinion that the value of the cryptocurrency will increase over the long run due to the fixed supply, in contrast to the variable supply of fiat currencies like the United States dollar and the Japanese yen.
While the supply of most currencies could be increased or decreased at the discretion of central bankers, the quantity of Bitcoin is limited to fewer over 21 million coins. Many speculators anticipate that the value of Bitcoin will rise while the value of fiat currencies will fall.
Those who are optimistic that bitcoin will become widely utilized as a kind of digital cash feel it has the ability to be the first money that is truly accepted around the world.