Wondering what Bitcoin is and if it’s worth investing in Bitcoin in 2023? We’ve got all the answers right here!
If you are about to dive into the world of cryptocurrency and want to know what Bitcoin is and if it is worth investing in Bitcoin in 2023, then keep on reading. This guide is for you.
As the world of cryptocurrency is constantly changing, we at Trading Education are here to help you stay up-to-date with crypto investing in 2023.
In this guide, we’ll explain Bitcoin and how and why it’s the ‘King of Cryptocurrency market’.
We will also try to answer the following questions, what is Bitcoin? Is Bitcoin a good investment? And should I invest in Bitcoin in 2023?
If you want to buy or invest in Bitcoin BTC quickly and easily, with 0% commission, check out eToro Exchange!
Bitcoin Explained: What is Bitcoin and how does it work?
Bitcoin! One of the most trending words online; one of the most discussed phenomena in the world of finance. But what is Bitcoin?
Bitcoin is the first digital coin created in 2009 by the enigmatic figure Satoshi Nakamoto. As a result of the financial crisis of 2008, Nakamoto proposed a digital currency to allow people to make payments easily, fast, and at lower costs.
One of the most appealing aspects of Bitcoin is its decentralised nature – no authorities and no fees.
Bitcoin runs its own blockchain, which is a collection of blocks or transactions, with 100% equal and transparent access.
To achieve its goals, Bitcoin relies on a strong consensus mechanism and cryptography, different nodes or computers, and miners. According to Coindesk, there are around 80,000 Bitcoin nodes around the globe.
Bitcoin was released in 2009 and in over a decade, it has become one of the most popular and traded assets ever.
Bitcoin’s ticker symbol is BTC, and you may see the two being used interchangeably. Despite its volatility, Bitcoin is an attractive investment option.
You might be interested to know that usually when we talk about Bitcoin as a platform, we capitalise the first letter, while when we talk about the actual currency bitcoin, we can use a small letter. But a lot of people don’t actually do this.
Would You Invest In Bitcoin?
How Does Bitcoin Work?
Now we know what Bitcoin is, let’s explore how it works and if it is worth investing in Bitcoin in 2023.
Bitcoin is an innovative peer-to-peer technology that relies on specific rules, nodes, and miners. Miners are the people who process Bitcoin transactions and ensure transparency and safety. Bitcoin mining is also the process of releasing new coins in circulation.
Naturally, to keep the system going, miners are rewarded. Note that this reward is halved every four years; the last halving (or ‘halvening’) took place in May 2020.
It’s also important to know that, unlike fiat currencies, Bitcoin has a limited supply of 21 million coins, which makes Bitcoin a desired investment.
While Bitcoin has grown from a peer-to-peer platform to a global phenomenon and a store of value, the truth is that Bitcoin transactions are slow, and mining takes a lot of power. Believe it or not, a Bitcoin transaction can take up to 10 minutes (depending on network congestion).
Interestingly enough, as a result of slow processing times, Bitcoin Cash was created in an attempt to make transactions faster. Bitcoin Cash is a fork of Bitcoin that has gained the support of many big Bitcoin investors (its ticker symbol is BCH).
That said, you don’t have to be a miner or a crypto king to realise the potential of Bitcoin in the world of finance. Though Bitcoin is an asset that differs from other investment options (for example, stocks), Bitcoin investing is definitely on the rise.
What is Bitcoin used for?
Bitcoin was created to be an alternative way to send money between peers without third parties, such as banks, who charge fees.
More recently though, Bitcoin has become a store of value. Many traders don’t use their Bitcoin for transactions, but instead, they hold onto it. This is because there is a theory that Bitcoin will eventually replace gold because of its scarcity.
According to Provident Metals, approximately 2,500 to 3,000 tonnes of new gold is mined each year, from an estimated remaining supply of 190,000 tonnes.
However, we don’t know how much gold is really left. There could even be gold, under the sea we don’t know about, or on the Moon or Mars, or a golden meteorite could hit Earth tomorrow.
Bitcoin, on the other hand, has a fixed maximum supply of 21 million coins. It is one of few assets in the world that has a fixed amount.
Investors have been especially keen to find a new store of value since the pandemic. To mitigate the economic damage, governments have been printing money which has lowered the purchasing power of fiat currencies like the US dollar.
It should also be noted that Bitcoin can be used for simple contracts (not complex smart contracts like Ethereum) and can host DeFi (decentralised finance) projects.
What is Bitcoin mining?
Bitcoin mining is how new Bitcoins are created and transactions are validated.
When transactions are initiated, they are placed into a block on the blockchain. Miners use powerful computers to solve complex puzzles and whoever solves the block the fastest wins.
The transactions in the block are now validated and the miner receives a fee from validating the transactions, plus newly created coins.
Mining has been criticised for being very energy consuming and it can result in high electricity bills for miners.
What is a Bitcoin wallet?
A Bitcoin wallet or just a ‘wallet’ is where your private keys are stored which gives you access to your Bitcoin. From your wallet, you can send and receive Bitcoin.
Technically speaking your Bitcoin does not actually exist in your wallet, it exists on the blockchain, but can only be accessed by whoever has the private keys.
There are many different types of wallets. They can exist on the web, on your desktop, mobile or even be stored on an external hard drive.
A further distinction can be made between ‘hot wallets’ and ‘cold wallets’. A hot wallet is connected to the internet and a cold wallet is not. Cold wallets are seen as safer as they are out of reach from hackers.
Some crypto traders have both a hot wallet and a cold wallet. They store their crypto in the cold wallet and only move it to the hot wallet when they want to make a transaction.
Remember: Never share your private keys with anyone! (Unless you want to get robbed!)
Is It Worth Investing in Bitcoin in 2023?
Bitcoin has changed the world of investing to a point of no return. As we can see, its nature and way of processing transactions are fascinating. No surprise that Bitcoin is the largest crypto by market cap of $805 billion, at the time of writing.
If you are wondering if it’s worth investing in Bitcoin in 2023, let’s dig more into its history. Because of its revolutionary nature, Bitcoin has changed the way we think about investing and money in general. Bitcoin has also led to the creation of many digital alternatives or altcoins, such as Ethereum, Litecoin, and Tether.
Bitcoin is highly liquid and often seen as a safe haven. In fact, some experts believe that Bitcoin may outperform gold, as mentioned above.
Investing in Bitcoin is worthy because it can help traders diversify their portfolios and hedge against inflation, too.
Billionaire investor and trader Paul Tudor Jones, for instance, is one of the financial gurus who believe that Bitcoin is a great hedge against inflation, just like gold in the 70s.
From short-term to mid-term to long-term investing, Bitcoin is a popular choice among traders and blockchain enthusiasts.
Looking back at 2019, for instance, Bitcoin saw a 300% Return on Investment (ROI) in the middle of 2019. Despite its jagged history and price swings, Bitcoin managed to survive the bear market triggered by the ongoing pandemic.
If we focus on Bitcoin sentiment analysis, we’ll see that the sentiment around this crypto is high, especially during the COVID-19 pandemic.
As reported by Trading Beasts, by December 2023, Bitcoin may reach a maximum of $50,185.028 and a minimum of $34,125.819.
At the same time, investing in Bitcoin in 2023 comes with numerous risks and uncertainties, so it’s only up to you to decide if Bitcoin investing in 2023 is worth it.
Who is investing in Bitcoin?
A lot of people are investing in Bitcoin right now. While many of the early investors were small-time, novice traders or crypto enthusiasts, today big banks and financial institutions are moving in too.
Some of them are huge names. According to Trading Education, the top Bitcoin investors include:
- Barry Silbert. His company owns 450,000 Bitcoins, according to Coinbureau.
- Tyler and Cameron Winklevoss (we’ll come back to these guys in a bit). The twins invested $11 million in Bitcoin in 2013. No one is sure for certain how much they still own.
- Digital Asset Holdings. While it’s not clear how much the company owns, their annual revenue for 2020 was $6.84 million, and it is worth speculating if any of that came from their Bitcoin.
- Dan Morehead. Morehead is known for his cryptocurrency ventures, including Pantera, Bitstamp, and Bitpesa.
- Michael Novogratz. In 2017, he stated that approximately 20% of his net worth was Bitcoin and Ethereum, and that he made $250 million in crypto between 2016-7.
By far the biggest holder of Bitcoin is Satoshi Nakamoto, Bitcoin’s mysterious creator, who is estimated to have approximately $1 million Bitcoin.
How Much Will Bitcoin Be Worth in 5 Years?
If you are wondering whether Bitcoin is a good investment or not in 2023, maybe you also want to know how much Bitcoin will be worth in five years.
As stated above, cryptos are highly volatile and nobody knows how much Bitcoin will be worth in the future.
Looking back, Bitcoin has had numerous ups and downs. Believe it or not, the first traded Bitcoin was worth $0.003. Now, it is trading at $42,576.76, so those who bought Bitcoin in the early days can enjoy an insane return on their investment!
Despite its volatility, many experts believe that Bitcoin has a positive future and claim that its value will increase in the next few years.
For instance, investor Tim Draper believes that by 2023, Bitcoin’s value will increase significantly:
“$250,000 means that Bitcoin would then have about a 5% market share of the currency world and I think that maybe understating the power of Bitcoin”.
And financial reporter Max Keiser has said, “I am officially raising my target for Bitcoin — and I first made this prediction when it was $1, I said this could go to $100,000 — I’m raising my official target for the first time in eight years, I’m raising it to $400,000”.
Though many factors affect Bitcoin and its price, such as demand and supply, technology, and sentiment, one thing is for sure: Bitcoin is here to stay and change the world of investment far beyond 2023.
What will Bitcoin be worth in 2030?
By 2030 Bitcoin could be worth between $145,243 and $148,168 per coin, a potential increase of +247%, according to Coin Price Forecast.
While Coin Price Forecast is known to be somewhat bullish on forecasts $145k is actually lower than other crypto enthusiasts are predicting.
Wealth manager Andy Edstrom for instance believes that Bitcoin could be worth $400,000 by 2030 (a market capitalisation of $8 trillion).
Meanwhile, tech investor Jeremy Liew and CEO and co-founder of Blockchain, Peter Smith, believe that Bitcoin could reach $500,000 by 2030.
This prediction is further supported by the Winklevoss twins, famous Bitcoin investors and founders of the Gemini cryptocurrency exchange.
In late 2020, the brothers stated that Bitcoin will skyrocket and reach $500,000 within the decade (AKA, 2030). They also added that they expect Bitcoin will surpass gold as a store of value.
Do note that making predictions this far ahead can get very messy very quickly. In the space of a few years, Bitcoin’s price can change enormously, and many forecasters do not agree on the exact price Bitcoin could reach.
Why Bitcoin is a bad investment
No investment is ever perfect and there are plenty of reasons not to invest in Bitcoin. Who knows, one of these reasons could be enough for you to avoid it.
So, what are the disadvantages of Bitcoin?
Let’s take a look at what most people are concerned about when it comes to Bitcoin.
Is it too late to buy Bitcoin in 2023?
While Bitcoin is a lot pricier than it used to be it perhaps is not too late to buy Bitcoin. Though the price is predicted to climb, Bitcoin is broken down into ‘satoshis’.
One Bitcoin can be broken down into 100,000,000 satoshis. This means that Bitcoin can be bought in very flexible amounts.
But the problem isn’t so much that Bitcoin is out of reach for normal people to invest in, it’s that many people are just hoarding it.
Originally designed to be a peer-to-peer digital currency, if investors continue to hoard it, it may become a problem because we will have a digital economy that doesn’t move.
And so, for Bitcoin to succeed, we need to see much wider acceptance among retailers otherwise there will not be too much use of the coin.
Will Bitcoin ever die?
The Bitcoin network is hosted over thousands of nodes across the world. This is what creates the decentralised network and keeps it alive and running.
Bitcoin could only die if all the nodes were taken out at once, which would be extremely difficult to do because they are so dispersed.
However, quantum computers are perhaps the biggest threat to the security of Bitcoin.
A quantum computer is an extremely powerful computer that can complete calculations much faster than standard computers. What makes them particularly terrifying is that they may be able to crack Bitcoin’s encryption.
Quantum computers, theoretically, could overpower the Bitcoin network and conduct a 51% attack. This would be devastating.
And if it ever happened it would be very likely everyone would stop using Bitcoin and it would be rendered useless.
Can Bitcoin ever crash to zero?
There is always the chance Bitcoin will crash. Bitcoin’s price has crashed several times before and will likely crash again in the future.
But crashing to zero? Not likely. Bitcoin’s value largely comes from the technology and the community that uses it.
In order for Bitcoin to crash to zero, it would have to lose its technological advantage and community.
While that isn’t likely to happen, crypto traders should always be open to the possibility of something better than Bitcoin coming along.
Remember, while Bitcoin was the first cryptocurrency, it by no means the best that will ever exist. Several cryptocurrencies have already been made to improve upon Bitcoin.
That said, if there was a sudden shift to another crypto, Bitcoin wouldn’t necessarily crash to zero as there will probably still be some hardcore followers who will keep using it.
Perhaps the only way to crash Bitcoin to zero is to destroy it with a quantum computer, as we explained above.
Should I Buy Bitcoin?
While Bitcoin is one of the most traded cryptocurrencies and can potentially make you a millionaire, that doesn’t mean you should buy Bitcoin.
Even if we base our future predictions on past performance and assume that Bitcoin is worth investing in 2023, you should do your own research and clarify your financial goals.
Are you interested in crypto day trading or ‘hodling’? Do you want to trade CFDs or own Bitcoin? Only after you’ve set clear and realistic goals, then you can get started and invest in Bitcoin.
Whether you decide to invest in Bitcoin or other cryptos and assets, do not forget that investing comes with high risks and unknowns. Without a proper risk management strategy and willingness to embrace losses, traders may experience financial and emotional disaster.
In fact, up to 90% of beginners who do not invest in education lose money and quit in their first year of investing. So, never underestimate the importance of risk management and trading psychology.
Never trade out of greed or revenge and learn how to control your emotions and stress in order to pave your way to crypto investing success.
Who Should Consider Putting Bitcoin in Their Portfolios?
Given the fact that there are more than 54 million digital wallets in existence, there’s no doubt that crypto investing is popular across the globe. Those who are willing to take the risk and invest in Bitcoin in 2023 may potentially make a profit.
Bitcoin is a great investment option for day traders who want to profit from high price swings and multiple trades during a single trading day. And Bitcoin is also a great option for mid- and long-term investors who want to buy and hold cryptos until a good opportunity comes up.
Finally, Bitcoin is also good for crypto enthusiasts who believe in the future of decentralised financial systems.
Are you one of them? Ready to dive into Bitcoin trading?
Final Words: Is It Worth Investing in Bitcoin in 2023?
Yes, it’s worth investing in Bitcoin in 2021. The most popular digital coin has already given crypto investors huge gains this year already.
Although it’s up to you to decide if you should invest in Bitcoin, let’s not forget that Bitcoin - the first digital coin that has inspired thousands of crypto projects - has numerous cons. It certainly has some risk factors.
The main advantage of Bitcoin over other cryptocurrencies is its liquidity. It’s noteworthy that around 15,174 businesses worldwide accept Bitcoin.
Users do not have to rely on that, though; with more than 5,041 bitcoin ATMs in existence across the globe, one can easily transfer Bitcoin to fiat money and vice versa.
Bitcoin’s market capitalisation is over $805 billion, which makes it clear that Bitcoin is the most popular and traded coin.
Put simply, Bitcoin is low-risk investment with lots of potential rewards. It’s something you should definitely do some research before investing in Bitcoin or other assets. Make sure you carefully consider all the factors that affect the price of BTC before deciding whether or not to invest in BTC.
Key Points
If you remember anything from What is Bitcoin and Is It Worth Investing in Bitcoin in 2023? make it these key points.
- Bitcoin is the first cryptocurrency. Its creation inspired thousands of altcoins and crypto projects.
- Many experts agree that it is worth investing in Bitcoin. Despite its high volatility, it could bring in huge gains.
- Investing in Bitcoin is not risk-free! Make sure you understand the cons before investing!
- Bitcoin will likely be around for a long time to come. Though Bitcoin has crashed numerous times, it has recovered, and would likely take a supercomputer to kill it.
eToro – The Best Exchange to Buy Bitcoin
eToro have proven themselves trustworthy within the industry over many years – we recommend you try them out.
Now you know what Bitcoin is and why it’s worth investing in Bitcoin in 2021!
If you’re feeling inspired to invest in Bitcoin, or this article has provided some extra insight into your existing trading knowledge, you may be pleased to know that eToro provides the ability to trade with Crypto assets and CFDs on up to 90+ cryptocurrency pairs.
Do you think that investing in Bitcoin in 2023 is worthy?
We hope this article about What Is Bitcoin And Is It Worth Investing In Bitcoin In 2023? has been helpful.
Read more:
Bitcoin Price Prediction Forecast: How Much Will Bitcoin Be Worth In 2023 And Beyond?
What Top 10 Cryptocurrencies To Invest In?
Top 15 Best Cryptocurrencies To Buy This Month
15 Reasons to Invest in Cryptocurrencies
Most Popular Cryptocurrencies In The UK
Top Cryptocurrencies To Invest In Australia
How To Trade Cryptocurrency with $100
Most Important Cryptocurrencies Other Than Bitcoin
Most Popular Cryptocurrencies In The USA
FAQs
Let’s take a look at some of the most common questions people have about Bitcoin.
What Is Bitcoin in Simple Terms?
Bitcoin is a digital platform that allows people to send virtual money across the Internet without relying on banks and financial authorities.
Transactions are recorded in a blockchain (or a chain of transactions), so everyone can see them in a transparent and timely manner.
The good news is that not only can you send and receive money globally but can also invest in Bitcoin.
Is Bitcoin a real coin?
No, Bitcoin is a ‘digital currency’, which means it only exists virtually. There is no physical version of Bitcoin.
Do note that you will often see pictures of Bitcoins online, but these are not real. They are primarily used for marketing materials.
Is It Legal to Invest in Bitcoin?
Though cryptocurrency investing is increasing in popularity, the truth is that its status is not very clear and crypto trading regulations across the world are still catching up with blockchain technology.
Thus, before you invest in Bitcoin, make sure you’re familiar with the crypto regulations and taxation that apply to the country you are based in.
How do I start investing in Bitcoin?
It’s easy to start investing in Bitcoin. All you need to do is choose a reliable platform with advanced trading tools, open and fund your account, and start your investment journey. Check out eToro that allows you to buy and sell Bitcoin and trade CFDs of over 90 crypto pairs.
If you’re considering adding Bitcoin BTC to your portfolio and want to know the answer to the question ‘is Bitcoin a good investment’, there’s no better place to start than by keeping on top of cryptocurrency trends and predictions.