Media Release: Tuesday, August 24, 2021, 06:30 CAT | Source: Luno
As more people become familiar with cryptocurrencies, you may be wondering what it’s all about and whether now is the right time to buy Bitcoin. Are you too late to get involved in the world of crypto?
Luno, South Africa’s leading cryptocurrency exchange, says you are still an early adopter if you are buying crypto for the first time even now. “The world has just started to recognize the potential of cryptocurrencies, so there is definitely more time to get involved,” says Marius Reitz, Luno’s GM for Africa, “Over the past few months, we’ve seen adoption mature, and the desire to understand and get involved in crypto continues to grow.”
The first step is to understand what the fuss is about. As an emerging technology, it is often compared to the internet in the 1990s – within the first decade, the internet’s multiple uses gradually became apparent. Bitcoin and the technology behind it is considered by many to be the payment system of the future – the main reason most Bitcoin holders have taken a long-term view.
“The problem Bitcoin is solving is much more important than whether it is too early or too late to buy crypto. Bitcoin is a new way of looking at our financial system; one that’s more transparent, open, and fair. It makes money more useful and helps it keep its value, providing a hedge against rising inflation and currency devaluation,” says Reitz.
Bitcoin crosses many lines: it can be used for payment, like a currency; it can be used as a store of value since it has controlled supply, like gold or other commodities; and it derives more value and utility from developers who improve the code and ways it can be used. Reitz cautions that it is still early days and that while Bitcoin has soared into a trillion-dollar industry, Bitcoin’s market cap is only about 10% of the gold in circulation.
“Luno believes that Bitcoin will play a key role in how we think about and use money in the future and for this reason, we don’t predict price,” says Reitz. A longer-term view shows crypto to be on an upward trajectory, even with massive price drops. The extreme volatility is expected to continue through more fits and starts.
Bitcoin has broken through all-time price highs in 2021. Since the start of May, the Bitcoin price first dropped by 30% but has now rebounded, rising from R571,954 on 4 August to trade at around R690,000 today. Many believe that the price of the world’s largest cryptocurrency will continue to rise.
BTC price since 2013
Global financial institutions are increasingly getting involved in crypto. Payment giant PayPal, for instance, is launching the ability to buy and sell crypto and Mastercard plans to give merchants the option to receive payments in cryptocurrency this year.
There are also several high-profile companies choosing to place millions of dollars of their treasury reserves into crypto, including Tesla, Grayscale, and Squared. Wall Street giants like JP Morgan, who were initially very skeptical about crypto, are now launching services to ensure their clients can include their crypto investments in their portfolios.
Says Reitz, “We haven’t yet seen the same level of corporate adoption in Africa, but there is greater adoption in countries with volatile currencies and where it is difficult to transfer money. When crypto payments become mainstream and people are more familiar with it, Bitcoin’s value will become much more apparent.”
Bitcoin’s design ensures that there will only ever be 21 million Bitcoin in circulation. Since the start of the global crisis caused by Covid-19, Bitcoin is seen by many as a hedge against inflation.
Traditional currencies are losing value as governments worldwide print money which reduces the value of fiat currency. When you see Bitcoin as a kind of insurance policy against the deterioration of your money, you realize that it’s a smart way to protect your wealth.
If you’re ready to buy crypto, here are some tips to get you started:
- Do your homework – every smart investment begins with educating yourself. What is Bitcoin, how does it work and what problems does it solve? Ensure you get your information from credible sources. Luno has a free learning portal and blog.
- Don’t invest more than you can afford to lose – you could easily get caught up in the excitement, but it is important to stay level-headed.
- Use a credible platform like Luno with a good reputation – buy through a platform with proven safety and security measures to keep your money safe. Watch out for scammers who offer to invest your crypto on your behalf. Rather invest yourself. If something sounds too good to be true, it usually is.
- Set realistic goals – consider investing smaller amounts on a regular basis (the rand cost averaging technique) to grow your Bitcoin slowly and steadily. Sometimes you will invest when the price is higher and sometimes lower.
- You don’t need to buy a whole Bitcoin – one Bitcoin currently goes for over R500,000, but you can buy a fraction of a Bitcoin for as little as R10 on Luno
You can download Luno’s simple-to-use app to get started.
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This article is a Media Release received from Luno. Global Crypto did not receive any form of compensation for its publication, and as this material is deemed newsworthy for the Southern African blockchain industry, it was thus published accordingly.