Bitcoin and schedule changes course

Why do people buy Bitcoins?

Wondering why people buy Bitcoins? Here is a guide on why individuals buy this digital currency.

Bitcoin is a digital currency that offers its users many advantages. These digital currency transactions are fast and cheap thanks to blockchain technology. Blockchain technology makes it possible to verify and record these digital money transactions.

This virtual currency is one of the greatest innovations to have been created and has made a huge impact on individuals in such a short period of time. Therefore, this digital currency is changing the world and society. Additionally, some people believe that this digital currency is the future of money. This digital currency is a global currency that promotes financial inclusion for the unbanked, creates robust economic activities, and encourages transparency. Here are some of the reasons why individuals buy this electronic currency.

Protection against inflation

Conventional currencies suffer from inflation because the government and banks regulate how individuals spend their money and how capital flows through an economy. Additionally, the government can print this currency and release it into the economy because fiat currency does not have a limited supply. Inflation is a global problem because it increases the prices of goods in an economy and reduces the purchasing power of the public.

Nevertheless, the Bitcoin protocol regulates the inflation rate of this digital asset, which is why it protects itself from inflation. This digital currency has a fixed supply, with individuals only able to mine 21 million Bitcoins. Due to this fixed supply, demand increases because everyone wants to own this digital currency, which causes its value to increase. Therefore, many people use this virtual currency as a store of value, since inflation does not affect it.

This digital currency is also halved every four years when miners generate 210,000 Bitcoins. Halving reduces rewards, which lowers the inflation rate. For example, the following halving process will take place in 2024; therefore, the inflation rate will also fall from 1.6% to 0.8%.

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Difficult to confiscate

Banks are not safe, as they can confiscate your fiat currency or even seize it with little or no warning. On the contrary, this virtual currency is different because it is not controlled by the government or central banks. Therefore, no financial institution can manipulate or maintain this digital currency.

When you purchase this virtual currency through an exchange, such as the French formula, you are usually given a digital wallet or created one. The digital wallet gives a person their private key, ensuring that only they can access their wallet. Therefore, individuals buy this digital currency because no entity can confiscate it.

Higher return potential

This digital currency is notoriously volatile, leading individuals to question its real value. For example, the value of Bitcoin increased in 2021, but fell dramatically in 2022. Since then, this virtual currency has still not recovered from such a drastic price drop. However, this virtual currency has seen an upward price trajectory since its creation in 2009.

Therefore, this digital currency has a higher return potential if you hold it for the long term. Some Bitcoin investors find the volatility advantageous since this digital currency increases in value after a price shock.

Asset class

Traditionally, asset classes included stocks, bonds or real estate. However, this virtual currency has entered the list of asset classes. Public and private companies are now adopting this electronic currency and allocating part of their savings to Bitcoin.

Additionally, some companies are bringing institutional investment in this electronic currency into the mainstream, meaning it will soon appear in pension funds and investment advisor recommendations.

The bottom line

Satoshi created this virtual currency as an alternative to fiat currency and provided individuals with financial freedom. Thirteen years later, this digital currency has given them many reasons to buy it. Additionally, this digital currency is a successful investment.