For most investors, Bitcoin (BTC +0.75%) doesn’t need an introduction. Given its sizable market cap of $1.5 trillion (as of April 10), it has high visibility that puts it in the same bracket as some of the world’s most valuable companies. What’s more, its incredible performance in the past decade speaks for itself.
But instead of focusing on the upside, which gets all the attention, let’s look at the downside. Is this the safest cryptocurrency to own for the long term? Here are three reasons why I believe Bitcoin easily fits that description.
Image source: Getty Images.
First-mover advantage
Bitcoin’s first block was created in January 2009. This cryptocurrency is over 17 years old, making it the oldest digital asset out there. This gives it a first-mover advantage that supports the view that it’s the safest crypto.
As mentioned, Bitcoin’s $1.5 trillion market cap is significant, giving it 59% of the total cryptocurrency industry. Besides adding to Bitcoin’s unrivaled brand recognition, that massive value gives Bitcoin tremendous liquidity.
Also, this blockchain possesses a powerful network effect. New stakeholders, whether they are nodes, miners, users, developers, or any external service providers, make the entire ecosystem more valuable to existing participants.
Decentralization equals resilience
One of Bitcoin’s most compelling features is that there is no single entity that controls things. Everything operates through consensus. Critics might say that this is a bug since things move slowly. But this setup is intentional.
There’s no shortage of failures caused by central planning. This could include entire countries, governments, institutions, and companies. There’s no risk that a ruling body changes Bitcoin’s rules to its own benefit at the expense of everyone else.
That decentralization, with nodes and miners operating all around the world, makes Bitcoin the most resilient, robust, and anti-fragile system on the planet. The fact that it has been operating without any issues for nearly two decades proves this point, despite there being numerous macro- and industry-related headwinds popping up.
Today’s Change
(0.75%) $530.88
Current Price
$71527.00
Key Data Points
Market Cap
$1.4T
Day’s Range
$70617.00 – $71584.00
52wk Range
$60255.56 – $126079.89
Volume
30B
Institutional adoption
The final reason comes down to how much Bitcoin is infiltrating the traditional financial services industry. Asset managers launched extremely successful spot Bitcoin exchange-traded funds. Financial advisors are recommending Bitcoin allocations to their clients. Even countries are building exposure in different ways, like the U.S. Strategic Bitcoin Reserve.
Bitcoin is also taking steps to facilitate more transactions. Fintech enterprise Block recently turned on Bitcoin payments acceptance for its millions of merchants. These are clear examples of innovation happening on top of Bitcoin, which further solidifies its position across the economy.
Bitcoin’s first-mover advantage, decentralization, and scarcity are key factors that make this the safest cryptocurrency to own for the long haul.