Bitcoin, the leading crypto by market capitalization, is again in the spotlight, primarily due to the Bitcoin halving event and the US SEC’s approval of spot Bitcoin ETFs. Following gradual gains throughout 2023, the dominant crypto soared to new all-time highs in March 2024, surpassing $70,000 for the first time.

(Since Bitcoin halving is around the corner, want to know what experts have to say about Bitcoin price prediction? Read here. )

However, determining whether Bitcoin belongs in your investment portfolio necessitates looking beyond current headlines. Bitcoin is undoubtedly a volatile and moderately risky investment, typically suitable only for those with a high-risk tolerance, robust financial standing, and the ability to withstand potential losses.

Should you invest in Bitcoin in 2024? According to experts, it’s crucial to maintain a diversified portfolio encompassing various investment types to mitigate overall risk exposure. As a general rule, don’t allocate more than 10% of your portfolio to Bitcoin.

Let’s begin our journey to know whether Bitcoin is still a great investment choice in 2024.

Hello There, Bitcoin!

Launched by the mysterious Satoshi Nakamoto in 2009, Bitcoin is widely regarded as the first crypto. It is a decentralized crypto that can be bought, sold, and exchanged without an intermediary like a bank. Bitcoin is both a mode of exchange, i.e., a currency, and a store of value or an alternative investment.

What separates Bitcoin from legacy fiat currencies is that it is a decentralized digital currency that is not controlled or owned by a centralized authority figure or institution. Instead, it operates on blockchain technology, which makes the operation decentralized, distributed, and transparent. That is why Bitcoin and other cryptos are hailed as the modern-day finance revolution!

Here’s a quick guide for buying Bitcoin in 5 simple steps at WazirX.

Bitcoin and Investment

Encryption is the basis for Bitcoin. Due to encryption, all transactions made in Bitcoin are carried out securely and anonymously, making Bitcoin one of the prominent cryptos.

As no financial authority regulates the currency, miners carry out transaction processing. Therefore, understanding how the market works, taking investment courses, and consulting specialized professionals are essential before making any decision. Those who receive payment in Bitcoins can exchange them for cash at trusted Bitcoin exchange platforms, like WazirX.

Buy Bitcoin in the INR market at WazirX here. Currently, Bitcoin is trading at INR 59,00,003.

It may sound complicated, and if you don’t have any knowledge about the financial market, this is perfectly fine. You can still invest in Bitcoin with a minimum of INR 100.

To prevent investment loss, it is important to do proper research and then decide how much to invest in Bitcoin and other cryptocurrencies.

Why Should You Invest in Bitcoin in 2024?

Given below are some benefits of Bitcoin that make it a good investment choice for investors:

• Less Competition

If only existing digital assets on the internet were considered, the competition would be significantly less. Although there is a wide variety of digital currencies to choose from today, such as Ethereum, Dogecoin, and Shiba Inu, none are currently at the level of Bitcoin.

• Institutional Investors Boost Bitcoin

Even though it is a digital currency, various giant investment firms have invested in this asset, believing it could be in great demand later. In fact, the increasing valuation of Bitcoin is because both large and reputed investors have begun to accumulate the crypto asset, or various consumer companies have started to adopt its use. Also, countries like El Salvador have adopted Bitcoin as legal tender.

• Resistant to Inflation

The inflation probabilities in Bitcoin are very low since the digital asset supply is limited to 21 million units by design. That is, there is no possibility that the number of Bitcoins will increase or decrease. It stays the same and is, therefore, not prone to inflation.

To understand whether Bitcoin is an inflationary or deflationary hedge, click here.

• A Safe Asset

Bitcoin is backed by blockchain technology, which allows it to be decentralized. This means that there is no involvement of a third party in the transaction process between the sender and the payer. This makes the sender and payer details anonymous, as only the Bitcoin address is revealed.

Is it Worth Investing in Bitcoin?

Before taking any Bitcoin investment decision, keep the following points in mind:

• Bitcoin’s Volatility: One of Bitcoin’s defining characteristics is its volatility. While BTC’s volatility can lead to substantial gains, it poses significant risks. Investors should be prepared for price fluctuations and assess their risk tolerance before investing.

• Market Trends: Monitoring market trends and sentiments can provide valuable insights into Bitcoin’s investment prospects. Factors such as institutional adoption, regulatory developments, and macroeconomic trends can influence Bitcoin’s price trajectory.

• Long-Term Potential: Advocates of Bitcoin often highlight its long-term potential as a store of value and hedge against inflation. With a fixed supply cap of 21 million coins, Bitcoin’s scarcity is often cited as a bullish factor for its long-term value proposition.

• Expert Opinions: Looking for advice from financial experts and analysts can offer valuable perspectives on Bitcoin’s investment outlook. While some experts advocate for Bitcoin as a strategic asset allocation, others caution against its speculative nature and advise careful consideration before investing.

• Diversification: As with any investment, diversification is key to managing risk. While Bitcoin may offer potential returns, investors should not overlook the importance of diversifying their investment portfolio across different asset classes.

• Risk Factors: Despite its potential, Bitcoin investment comes with its own set of risks. These include regulatory uncertainties, technological vulnerabilities, and market manipulation. Investors should do thorough research and due diligence before allocating capital to Bitcoin.

To Conclude

Deciding whether it’s worth investing in Bitcoin depends on individual circumstances, their risk tolerance, and investment goals. While Bitcoin’s price may experience short-term fluctuations, its long-term potential as a disruptive financial asset remains a topic of debate among investors. As with any investment decision, weighing the potential risks and rewards before making an informed investment choice is essential.

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.