Bitcoin turned seven this year, and it is seemingly maturing. Noticeably, Bitcoin represents a new assets class. However, not many people have sufficient information on this type of a digital asset, leave alone how to invest in it. Bitcoin has almost zero correlation to other asset classes. Stock investors should consider diversifying their portfolio with Bitcoin as an alternate asset class. Bitcoin has been rewarding excellently depending on the amount of risk taken.

Many people would ask why they should invest in Bitcoin to benefit from its high returns. Well, there are various reasons why Bitcoin should be the ultimate choice for investors who value their investments. Following are some of the numerous reasons why you should invest in Bitcoin.

The supply of Bitcoin is fixed

Since 2009, Bitcoin has seen its value shoot from nothing to $500+ currently. Due to it’s the capabilities as a form of digital currency, it has increasingly gained in profile throughout the world. Most of the worth people attribute its value to the ability to transfer money through Bitcoin to anywhere in the world cheaply and in a secure system. What will make Bitcoin increase and retain its value is the supply cap it has. On reaching a limit of 21 million Bitcoin in circulation, no more new Bitcoin will be created. Additionally, the number of Bitcoin released will be sliced by half after every four years.

More people and businesses continue to use Bitcoin

If the volume of the transaction will make the price increase, then the current trends in both merchant and transaction adoption auspicate clearly the Bitcoin value. The daily transactions volume of Bitcoin has significantly increased over time. In the short-term, the transaction volume may have less impact on the value of Bitcoin. However, over the long-term and continued adoption by merchants and individuals, the value will increase notably. Currently, only 2% of merchants accept Bitcoin, but in the next few years, over 25% expects to offer it.

Bitcoin will increase in value when properly adopted

As the society continues to ingrain this digital currency, and more products and services are built on it, more and more firms will want to have Bitcoin play on their rails. Continued adoption translates to increased prices of Bitcoin. The more it becomes used in transactions, the more it will require a certain monetary base to power this virtual currency up. Investing in Bitcoin may not be highly rewarding currently, but for the near future, around 2025, Bitcoin will have grown in both adoption and value.

A higher price, a higher transaction volume

When the price of Bitcoin increases, more transaction will be made with it. When the price of Bitcoin goes up, more people will become interested in Bitcoin. Increased interest translates to more users meaning more people will transact using this digital currency. More transactions volume will lead to more people buying more Bitcoin, which will result in more people creating accounts and using Bitcoin more often. An increase in price will lead to the creation of a wealth effect, which will prompt people to spend their Bitcoin, increasing the transaction volume. Hence, maintaining the value of Bitcoin.

For the baseline, the decision to invest in Bitcoin depends on the investment goals you have, your appetite for risk as well as time horizon. In coming years, the price of Bitcoin might be zero or double what it is now. Hence, you should invest what you can afford to lose.