5 Reasons to (still) buy Bitcoin in 2019

Alex Lielacher 13 Jan 2019, 15:00 UTC

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Despite last year’s steep price correction, which led many to suggest that the “crypto bubble” may have finally burst, there are still plenty of good reasons to buy bitcoin in 2019. If anything, its current price level may actually provide an excellent buying opportunity.

In 2017, bitcoin had an incredible year, rewarding investors with a 1,350 percent return and an all-time high of $20,000 as an early Christmas present in December. In 2018, however, the picture was very different. Bitcoin lost over 70 percent of its value, dropping from $14,000 on January 1st to below $4,000 to close the year. While the jury is still out on whether bitcoin has bottomed or not, here are five reasons to feel positive if you are weighing up a buying decision.

1. Bitcoin adoption is growing globally

Despite the drop in bitcoin's value, global adoption is on the rise. For example, the number of users of the popular Blockchain wallet has steadily increased throughout 2018. The company's data shows an increase from 22 million to over 32 million wallets in the past twelve months, which suggests that people's interest in bitcoin has not waned despite its price correction.

Moreover, trading volumes at leading peer-to-peer bitcoin exchange, LocalBitcoins, suggest that bitcoin adoption is growing in emerging markets. Most notably, South American countries such as Argentina, Chile, Colombia, Peru, and Venezuela, showed an increase in bitcoin trading volumes throughout 2018.

With the introduction of the Lightning Network, bitcoin merchant adoption is poised to increase as these new payment channels will provide faster payments at next to no fees.

2. Regulations are coming and that's a good thing

Discussions surrounding a global regulatory framework for cryptographic assets at the G20 meetings in 2018 has made it clear that lawmakers and financial regulators are keen on ensuring that the trading of crypto assets will adhere to similar rules as equity and forex trading.

While early bitcoin adopters from the cypherpunk community probably disagree, it is arguable that regulations are actually a good thing for crypto investors.

A regulated crypto asset market will entice more retail investors to join the fray and will provide the much-needed regulatory stamp of approval that institutional investors such as mutual funds, insurance companies, and pension funds require to invest in an asset class.

As KYC/AML checks are being implemented on exchanges around the world and regulators are slowly starting to formulate a framework for token sales, we can expect more regulatory oversight and enforcement in 2019, which could be beneficial for bitcoin as it will make the bitcoin trading ecosystem more secure.

3. Wall Street is going crypto

Last year, Fidelity, Nasdaq, and the Intercontinental Exchange (ICE) announced plans to launch cryptocurrency trading offerings for institutional investors in 2019.

Most notably, ICE's new venture, Bakkt, is expected to drive more Wall Street firms to trading bitcoin as the planned regulated crypto asset trading platform will launch with bitcoin derivatives and crypto custody service and plans to roll out crypto merchant payment services later on.

Moreover, the number of crypto hedge funds has reportedly increased in 2018, which means more institutional money is poised to enter bitcoin as an asset class in the coming months as these funds raise money to increase their assets under management.

4. Bitcoin developers are (still) innovating

There are many people - especially in the altcoin community - who believe that bitcoin will eventually be replaced by another, superior decentralized digital currency in the future. What many of these individuals seem to forget, however, is that bitcoin is not static.

Bitcoin developers are continually working on improving the Bitcoin network to boost its scalability, to add privacy-enhancing features, and to enable other functionalities such as smart contracts.

The release of the Lightning Network and the Liquid Network in 2018 are a testament to bitcoin developers' commitment to its positive evolution.

5.Bitcoin has always surpassed its all-time highs after a price crash

Finally, it never hurts for investors to look at historical price data. Bitcoin has seen many peaks and troughs in the last ten years and has been reported "dead" over 340 times in mainstream media. However, it has always managed to surpass its most recent all-time highs so there is little reason to think that the same will not happen again.

In mid-2011, the price of bitcoin hit $30 on the most popular exchange at the time, Mt.Gox. Following a hack of the exchange, the price collapsed to a low of only $2 by November 2011 before recovering again in 2012.

In April 2013, bitcoin briefly hit the $260 mark, before tanking by over 50 percent within hours as Mt.Gox was unable to handle the increase in trading volumes and was hit with a DDoS attack. Despite a drop in investor confidence in the bitcoin trading ecosystem, it only took bitcoin seven months to surpass its most recent high again.

In late 2013, bitcoin hit the symbolic $1,000 mark for the first time, but the price gradually collapsed to a low of $175 in the two years to follow. Two years after that, at the start of 2017, bitcoin hit the $1,000 mark once again and surpassed its previous all-time high to hit its famous December 2017 all-time high of $20,000 per coin.

Historical price data suggest that bitcoin is poised to exceed its most recent all-time high again, even though it may take a few years. Many bitcoin-positive developments have been overshadowed by its price activity last year, but over the next twelve months investors could see these developments reflected in bitcoin's price.