There are a lot of options when it comes to investing your money: foreign currencies, gold and silver, stocks, and the newest option, cryptocurrencies. Bitcoin is the most well-known and valuable cryptocurrency, and more and more people are choosing to invest in bitcoin versus stocks. But should you?
Here are five reasons why investing in bitcoin is better than putting money into the stock market:
Bitcoin vs Stocks: Poor Predictions for the US Stock Market
Many experts agree that the stock market is in a bubble and it’s just a matter of time before it pops. In September 2017, billionaire investor Julian Robertson said, “The market as a whole is quite high on a historic basis … interest rates are so low that there’s no real competition for the money other than art and real estate.”
Historically speaking, the only time stocks were costlier was during the Tech Bubble. You know, the single largest stock market bubble in history. In August 2017, the Federal Reserve, who tends to downplay market risk, even admitted that “since the April assessment, vulnerabilities associated with asset valuation pressures had edged up from notable to elevated, as asset prices remained high or climbed further, risk spreads narrowed, and expected and actual volatility remained muted in a range of financial markets.”
While some financial advisors claim that FANG stocks are holding strong, most people agree that stock prices are too high and it’s going to come crashing down soon. Bitcoin is poised for mainstream acceptance and when that happens its worth will increase exponentially. Consider this, what would have been $100 worth of bitcoin in 2010 would now be worth over $100 million.
Bitcoin vs Stocks: Bitcoin is resistant to Manipulation
One of the biggest criticisms bitcoin gets is that it’s not backed by the US Government, so it can’t be trusted. The irony of that statement is that the many of bitcoin’s proponents favor it because they have more confidence in Bitcoin than their nation’s currency.
Take the US for example. Our stock market is in a bubble and some people are blaming the Federal Reserve. The US dollar is essentially backed by nothing since we left the gold standard decades ago. The Federal Reserve’s ability to print more money means they have a huge amount of influence over the economy which can lead to bubbles, and subsequent crashes.
Bitcoin is not controlled by a single entity, and therefore, counterfeit or additional coins cannot be produced. The expected bitcoin supply is believed to be limited at 21 million. It protects Bitcoin from being manipulated in the same way US dollars can be. Confidence in national currencies as a source of wealth is waning in many countries such as India, Venezuela, China and even the US. Investing in stocks is investing in the worth of the dollar which isn’t trustworthy.
Bitcoin vs Stocks: Quicker Returns with Bitcoin Investments
For the most part, investing in the stock market is seen as the long game to financial wealth. Some people don’t see significant returns on their stock investments for decades. Bitcoin, on the other hand, is providing quick returns due to its quick growth.
From its 2009 beginnings, bitcoin’s price has peaked at $4,765 in early September 2017 and is currently settled around $3,665 a coin. Though it can be volatile, bitcoin shows no signs of slowing down and investments have historically yielded very high returns, all in less than a decade. Mainstream adoption of bitcoin hasn’t happened yet and when it does, the price will increase even further.
Bitcoin vs Stocks: Bitcoin is Convenient
Bitcoin is a currency. So you can purchase goods with it as soon as you invest in it, unlike stocks which require you to sell the stocks and then use the money from the sale.
Your investment isn’t tied up — you can spend the money as soon as you’d like to. Companies such as Overstock.com, PayPal, and Microsoft all accept Bitcoin, as do thousands of other small businesses. Bitcoin is the clear winner when it comes to convenience.
Bitcoin vs Stocks: Invest in your Beliefs
Some people invest in bitcoin for the profit, some for security, but many do it because they believe in the power of cryptocurrencies. Across various political spectrums, people are drawn to a currency that isn’t controlled by any one government. To some, it’s almost an act of protest to buy and sell goods using bitcoin instead of dollars – they are stepping outside of a broken system and investing in liberty.
There is a clear winner it comes to bitcoin vs stocks. Whether you are looking to take a political stand or you simply want to increase your wealth quickly, bitcoin is a better bet than the stock market.