Should you still invest in bitcoin in 2017? Or are you too late to the party? The good news is that the answer is most likely ‘no’.
Since its inception in 2009, bitcoin has continued to gain momentum and has increased substantially in value.
Today, one bitcoin is worth three times as much as one ounce of gold, thanks to its utility as a decentralised alternative currency that anyone with an Internet connection can use.
Although bitcoin’s price is very volatile and has suffered several price crashes during different periods of time, the latest being in June 2017 where the prices dropped by about 25 percent, the price has always managed to bounce back within a relatively short time to reach new highs thereafter.
At the time of writing, the price of bitcoin is trading above $4,500, which marks an over 350 percent increase in value since the start of the year.
1.The Demand for a Cashless Society
The world is making strides in pushing forth the agenda for a cashless society.
This is evident with the rise of mobile payments and other digital payment services such as PayPal or Skrill, which have become very popular in recent year.
However, as bitcoin is decentralised, is faster and comes with much lower fees than its digital peers, it has managed to gain substantial traction in its eight years of existence.
With the above in mind, digital currencies such as bitcoin have also caught the eyes of investors leading to an increase in demand for bitcoin not just as a currency but also as an alternative investment.
2.Demand for Bitcoin is Growing Around the World, Especially in Emerging Markets
The demand for bitcoin is growing on a global scale. The largest bitcoin economies such as China, Japan, South Korea, and the U.S. are experiencing increases in bitcoin buying.
However, it is emerging markets countries such as India, the Philippines, Indonesia, and South American countries such as Venezuela, Bolivia, and Brazil that are experiencing some of the strongest surges in bitcoin buying.
The reason for the surge in demand for bitcoin in some of the above-mentioned emerging markets nations is the need for a stable currency and store of wealth during times of economic crisis.
Countries such as Bolivia and Venezuela, for example, are struggling economically. This, in turn, has caused their local currencies to weaken substantially.
This is where bitcoin has been able to step in as a store of value and as a means to make purchases online.
The demand for bitcoin is also increasing across Africa with Kenya, South Africa, and Nigeria leading the continent in terms of bitcoin trading volumes.
Moreover, countries such as Ghana, Zimbabwe, and Egypt are also showing clear signs of increasing bitcoin adoption demonstrating that bitcoin is on the rise in Africa.
Notably, bitcoin in Kenya has seen a substantial boost trading volumes and an increase in users in the past twelve months.
More and more Kenyans are looking at bitcoin to diversify their investments, and to profit from the sharp increase in price that bitcoin has been experiencing since its inception.
The more the demand for bitcoin increases, the more its value will continue to increase as the total supply of bitcoin is limited to 21 million coins.
3.Bitcoin Acceptance is Increasing Among Governments and Regulators
When bitcoin first launched around eight years ago, governments and regulators were very sceptical of bitcoin as neither can have control of it due to its decentralised nature, and neither were fans of bitcoin transactions’ pseudonymity.
However, lawmakers are starting to change their minds as they recognise the value that bitcoin can bring to their economies and their citizens.
In April 2017, Japan announced that it is officially recognising bitcoin as a payment method, and both Australia and Russia have announced that they are considering similar moves.
The increase in “official” acceptance will continue to push the price of bitcoin higher as it has when Japan first announced the “bitcoin legalisation” in April.
In Africa, South Africa benefits from having a relatively bitcoin-friendly Central Bank. The South African Reserve Bank has so far given bitcoin startups the leeway they need to develop new solutions, which has helped the country’s bitcoin economy grow.
Recently, the SARB announced that it will be testing new bitcoin and cryptocurrency regulation in an attempt to find the right balance between protecting consumers and giving its financial technology start-up sector enough room for innovation.
4.The Successful ‘SegWit’ Update
In a move to increase transaction speed and to help scale the bitcoin network, bitcoin developers have created an upgrade to the bitcoin blockchain bitcoin, which has been implemented in August.
The update called Segregated Witness, better known as ‘SegWit’, makes it possible for the bitcoin network to process more transactions than before, which allows for faster transactions and lower bitcoin fees.
In 2017, the average time for a bitcoin transaction has been around 30 minutes. The ‘SegWit’ software update has been able to reduce transaction times substantially.
5.Bitcoin’s Image is Changing for the Better
In the past, bitcoin’s use was often associated with the criminal underworld due to its decentralised and pseudonymous features that allow anyone to send money to someone without governments and regulators being able to easily identify the account holders.
For that reason, bitcoin was sometimes titled “the currency of the criminal underworld”. However, those times are long gone.
Bitcoin has stood the test of time and emerged as a widely accepted alternative digital payment method as well as a new alternative investment that established fund management companies, such as Ark Investment Management and Rothschild Investment Corporation are now investing in.
So should you still invest in bitcoin in 2017? Yes, you should.
If you want to learn more about bitcoin and blockchain technology, check out Africa’s leading bitcoin news publication Bitcoin Africa for news, commentary and insights into the world of cryptocurrencies.