Finance & Insurance

Has Bitcoin Already Become a Scarce Financial Asset of Our Times?

Introduction

As you are reading this article, 16 Million of the estimated 21 Million Bitcoins have already been mined. This means that investors looking to stay on the sidelines will probably regret their decisions in the near future.

Some of the leading experts in the crypto universe feel that Bitcoin has already started to become scarcer as a financial asset.

If you have been following the news, you will know that some prolific Crypto Exchanges are already reporting a shortage of Bitcoins for the past few weeks.

In this article, we will look at this issue and discuss whether it is something real and troublesome for investors.

Why is Bitcoin Suffering from Scarcity in 2020?

Apart from the obvious reasons that more people are trying to invest in cryptocurrencies, there are certain important institutional reasons.

Many insiders feel that the recent foray of PayPal in the ecosystem has been responsible for this scarcity. It seems that the folks at PayPal, to cement their position as the leading player in the digital payment world, have bought a significant chunk of Bitcoin these past few weeks.

In addition to PayPal, some of Wall Street’s biggest names are also queuing up outside exchanges and trading platforms, hoping to get their hands on some Bitcoin.

At the start of the year, the retail investors were hunting for Bitcoins on a never-before scale.

However, the rapid growth in the second half of the year saw institutional investors like investment and wealth firms starting to get interested in Bitcoins and other cryptocurrencies.

Many experts feel that this is just the start. Bigger players with more reserves to invest and burn are very likely to buy all Bitcoins in circulation. There is a certain fear that monopolization can take place because of Wall Street interference.

Can Exchanges and Trading Platforms Play a Constructive Role?

It is important to understand that Bitcoin intends to prevent what is starting to happen now as a financial asset.

In other words, Wall Street’s power and resources taking over something, which was intended to help the common people because of its decentralized nature, are radically getting altered.

This is why many leading voices in the industry state that it is up to the Exchanges and Trading Platforms to ensure that the monopolization is checked.

While some state that bigger investors will lead to more lobbying against the government and adding to the legalization process, others state that we are simply walking down the same path once again.

At a time like this, bitcoin mining platforms help regular investors like you and me invest in cryptocurrencies like Bitcoin. If exchanges can play a constructive role in this regard, both Wall Street firms and normal human beings can expect to derive advantages from crypto trading and investing.

What should Retail Investors do in the Event of Bitcoin Scarcity?

If you are a retail investor who owns Bitcoin or is looking to invest in some, playing the waiting game is detrimental to your interests. Like we already stated, the more you wait, the higher are the chances of bigger firms snapping up the remaining Bitcoins in circulation.

If the price volatility and fluctuations are something, which is bothering you, then fret not; Bitcoin has changed. While the coming in on these bigger firms and investment companies might have its list of disadvantages, the one thing that they have been able to bring is stability.

Bigger wealth management firms hold on to assets for the long run. Bigger firms do not just want to make a thousand-dollar profit. They want to hold onto their investments and see a drastic rise in the near future.

Experts feel that price fluctuations are going to stop because of these very reasons. Retail investors should note that the price fluctuations, which characterized Bitcoins in earlier times, will not be a problem anymore.

The Final Word

There is no doubt that Bitcoin is becoming scarcer. If you feel that the price is at a point where you will not be able to invest, you should look for alternative cryptocurrencies. There are a few credible ones on the market, which are showing some positive results.

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