Why This Cryptocurrency Is Best for New Crypto Investors
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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Cryptocurrencies are still relatively new, and people are naturally skeptical about whether these digital coins are worth all the hype. At the same time, cryptocurrency experts continue to push for people to add them into their portfolios with the argument that these currencies will only gain in value and usage.
For a new crypto investor, if you’re just dipping your toe into the cryptocurrency realm, there’s one you’ll likely want to prioritize over others: bitcoin.
John Haar, managing director at Swan Bitcoin, explained why bitcoin is the one to consider.
Bitcoin Is a Respected and Fixed Cryptocurrency
Perhaps the most compelling reason to start with bitcoin is that it is the original cryptocurrency, the first introduced in 2009, Haar said, and one of the most respected and stable coins out there now.
Not all cryptocurrencies are payment currencies, in fact. Haar describes bitcoin most accurately as “a fixed supply, decentralized digital monetary asset.” He pointed out that when you look at every other cryptocurrency, they do not all meet that description.
Additionally, even other forms of currency, such as dollars, do not have a fixed supply.
“In other words, right now, if you hold one bitcoin, you hold one bitcoin out of 21 million bitcoin,” which Haar said is “akin to holding $1 out of the total supply of dollars, with a very big difference being that the total supply of dollars is not a fixed number, it’s anything but fixed.”
Bitcoin Is Among the Most Held Cryptocurrencies
In order for something to be a monetary asset, there has to be a certain amount of usage, Haar said, with people holding it, saving and storing their value in it.
“A lot of the other tokens really don’t meet that description either. So we really do believe that bitcoin stands in a category of its own.”
It Has the Largest Market Cap
In addition to being the first of the cryptocurrencies, bitcoin is also the largest, Haar explained.
“If you take the number of bitcoins that are in existence — there’s close to 21 million in existence today — and you take the current price of roughly $96,000, that gives you a total market cap for bitcoin of $1.9 trillion,” he explained.
The next biggest cryptocurrency after bitcoin is Ethereum, with a market cap of $320 billion. “So bitcoin is many multiples bigger than the next cryptocurrency.”
You Can Invest In Bitcoin in Numerous Ways
It’s unlikely that the average investor will have multiples of $96,000 to drop on bitcoin today, but fortunately, you can invest in bitcoin in other ways, including investing in crypto exchange traded funds (ETF), through investing in bitcoin “infrastructure” such as blockchain technology and semi-conductors, by investing in bitcoin mining stocks (publicly traded companies that run the equipment that validates bitcoin transactions) and more.
If you can purchase bitcoin directly, there are also different ways to “hold” it — whether yourself in a digital wallet, some other organization or financial institution can hold it for you, and so on.
“I would say you start small and as you develop more confidence, you can grow it over time,” Haar said.
Bitcoin Has Huge Growth Potential
While bitcoin may be the largest and most well-known cryptocurrency, Haar feels we’re only at the tip of the iceberg in terms of its adoption.
“I think the reality is that most people have heard of bitcoin, but a lot of them have not taken any action on it yet. And I think what we’re going to find in the coming years is that people are going, it’s going to be very normal for people to have 1% to 5% of their net worth in bitcoin and some are going to have a lot more than that of their net worth in bitcoin.”
He believes that bitcoin will match the market cap of gold by the year 2030.
You Should Still Be Cautious
Even as exciting and full of potential as bitcoin is, Haar concedes that you still need to be thoughtful and discerning in how and how much you invest in it. Bitcoin does present with risks, though he argues that so do other kinds of investments like real estate and stocks. Haar recommended investing no more than 5% of your liquid net worth to start with.
People who invest in bitcoin tend to spend a lot of time researching it, Haar pointed out, through books, podcasts and more.
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