Better hold than trade
One of the best investment strategies for Bitcoin is considered to be its long-term hold or, as it is also called in the cryptocurrency community, HODL. By the way, this word appeared thanks to one representative of the cryptocurrency community, known by the nickname GameKyuubi, who, in the text about his Bitcoin retention strategy, was mistaken in the word hold.
As Bitcoin appeared, 1,500 coins could be purchased for 1 US dollar, now the price of the flagship cryptocurrency is $ 10,000, having managed to reach a peak of $ 20,000 at the end of 2017. You can study the reports of traders who have earned good interest on Bitcoin trading for all these years for a long time, but these percentages will not even be able to get close to the profit that the holding investors received.
The profit that people bought Bitcoin, for example, in 2013 and still hold it, currently stands at 3800%, an average of 542% per year. Having invested 1,000,000 rubles in Bitcoin in 2013, you would now have 39,000,000 rubles at your disposal. Such an incredible figure actually indicates that the long-term storage of BTC is a very correct decision and the most profitable investment activity.
Many top managers, leaders of the world’s largest companies and analysts predict that the growth of Bitcoin will continue. Some people assume that the price will rise up to $ 1,000,000 in the near future, others think of a smaller rise: $ 288,000 by 2024. Both development options of Bitcoin prices cannot be ruled out, therefore Simba.Storage analysts strongly recommend investing any possible amount in this asset for yourself and just wait.
Let us have a closer look at all these predictions and the reasons for Bitcoin growth.
Why the Bitcoin price is growing
The main factor behind the rise in Bitcoin price is a constant increase in demand and its limited emission. More and more traders, investors and just those who want to have cryptocurrencies for everyday payments (for example, because of the total transaction confidentiality) buy Bitcoin or use it for cross-border transfers from one part of the world to another. Recently, it became possible to buy various movable and immovable property by BTC.
Since the nature of Bitcoin is unique and its quantity is limited, this naturally leads to an increase in its price. Especially if you consider the speed of this process which increases every year, you don’t need to be an analyst to see a further increase in the cost of BTC.
Also, the technology for issuing new Bitcoins (mining) goes together with regular halving in the network (halving rewards for mining Bitcoin every 4 years) which causes the emission rate decrease. As a result we have a currency deficit which ( as you know) naturally leads to its value increase.
The Bitcoin exchange rate has been growing during the time of its existence, yet it often fell over the past two years. It can be called a price correction and the general growth will continue in the future. This will be supported by the acceptance of cryptocurrencies around the world and their integration into the modern economy.
Bitcoin Value Forecasts
According to April forecasts of investment companies, Bitcoin is starting its path to long-term growth up to $ 100,000, which is more than 1000% of the current price. Halving is mentioned as one particular reason for that. By the way, the last time it was on May 11 and should have a positive impact on the price by the end of 2021. Another reason is macroeconomic conditions, namely the depreciation of national currencies, which will encourage people to invest in anti-inflationary assets.
For example, the head of bitcoin fund venture in Pantera Capital also predicts Bitcoin growth to more than $ 100,000 in August 2021. Among the main factors for this is the bitcoin halving, which should lead to a reduction in the currency supply and, therewith, let the price reach $115,212 in 2021.
According to the report by Global Macro Investor which was published in March 2020, the value of Bitcoin should rise up to $ 1,000,000. The analysts predict the same positive future of gold.
The head of Global Macro Investor is also sure about the growth of the cryptocurrency market capitalization up to $10 trillion.
The main reason for the growth is the fact that Bitcoin is a proven cryptographic system of accounting for funds, which is the future of the entire exchange system. Another reason is the fact that cryptocurrencies are a solution to the problem of the current unfair and underdeveloped economic model, where large enterprises always win, while individual entrepreneurs and small businesses are left with nothing.
A team of experienced analysts from Simba.Storage also are of the opinion that the Bitcoin price will have a multiple increase in the coming years. They also consider the long-term storage of this cryptocurrency as the most profitable investment option.
It is also important to understand that due to the same limitations of Bitcoin and its increased value you need to think carefully about security. You should use cold storage methods to maximize the safety level and at the same time to protect yourself from the thought of using this investment capital for trading. Simba.Storage experts recommend their customers to buy at least a component of a Bitcoin (in case if it’s not possible to buy a whole Bitcoin) and just leave it in secure hardware wallets and in suitable countries for that, in particular, Switzerland and Liechtenstein.
Such an investment may become 100, 1000 or even 10,000 times bigger, which makes Bitcoin an obligatory part of any investment portfolio, the difference is only in the proportions. You should also understand that if this kind of investment is planned for many years then the current prices should not bother us.
Last spring, a well-known blogger and economist from the Plan B fund introduced the Stock-to-Flow model for Bitcoin. This model is a formula that is based on monthly data of the comparison of Bitcoin reserve to its growth and price. Many quantitative analysts around the world noted this model and confirmed the stability of the relation between Stock-to-Flow (S2F) and the cost of BTC. Without a deep dive into details, we can see that the S2F Bitcoin model demonstrates that the price of BTC in the period from 2021 to 2024 should rise to $ 288,000.
Challenges of Trading
When choosing between trading or HODL, you must also consider the complexity of the first one. There are many details in cryptocurrency trading that you should take into account in order to get at least some profit. Also statistics show that only 1/5 of traders earn, while the rest either stay at the same position or lose.
If you want to trade you should have an expensive and time-consuming training, practice this knowledge in reality, strictly follow all the rules and apply the skills that you have learned. You should learn how to control your emotions, be disciplined when following a trading strategy and of course face losses. Every trader bears losses by getting the first experience.
The Simba.Storage team offers a long-term Bitcoin hold as an alternative to time-consuming trading and provides services for Bitcoin storage in cold wallets with a high level of protection. When you store your Bitcoins in Simba.Storage, you will receive SIMBA stablecoins as a guarantee that you can get your BTC back on your demand. SIMBA, in turn, can be used for storage and payment, cross-border transfers. In case of unforeseen emergencies, for example, loss of passwords, Simba.Storage customers can always get the access to their funds using the KYC process (identity verification procedure).
