Is It Too Late to Invest in Bitcoin? Five Reasons to Invest in Crypto in 2019

  • Alex Morris
    📚 WikiCoin

    2018 was a brutal year for the cryptocurrency industry, but we’ve come up with major reasons why Bitcoin could still be your wild card this year

Is It Too Late to Invest in Bitcoin? Five Reasons to Invest in Crypto in 2019
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Since the Bitcoin bubble popped, there have been numerous stories about people losing their fortunes by throwing money into crypto when prices were going through the roof. However, despite market bears reigning supreme since January, there were 54 mln new users in 2018 (the number almost doubled compared to 2017). That essentially shows that the interest is still there (‘What is Bitcoin’ was among the most popular Google searches in 2019).

So, is it too late to invest in Bitcoin? Not really. There are actually plenty of reasons why you shouldn’t write off Bitcoin as a good investment opportunity.

Institutional money is coming

Crypto desperately needs a dose of reputational repair – Bitcoin, despite its ten-year long history, is still mainly perceived as the currency of drug dealing and crime thanks to loud headlines about Silk Road, Mt. Gox, etc. However, crypto is currently getting a much more positive response from institutional investors. Their learning curve starts with skepticism, which is absolutely understandable given the tainted history of crypto, but many institutions are fascinated with the technology.  

2018 was already a precursor to large-scale institutional adoption. As U.Today reported earlier, Wall Street permabull Mike Novogratz is certain that major institutions will start embracing the cryptocurrency space by Q1/Q2 2019.

Novogratz’s words have also been channeled by Asian crypto enthusiast Henri Arslanian, who claimed that more major banks would start dipping their toes into crypto in 2019. Banks around the world have already adopted many Blockchain-based solutions, but they retain a hostile attitude towards crypto.  

BlockTower Capital CEO Ari Paul, however, believes that Wall Street has adopted a lazy ‘wait-and-see’ approach. Now, he predicts that adoption won’t happen until Q3 2019, dismissing his previous prediction as ‘too optimistic.’

Fidelity also launched Fidelity Digital Assets in October 2018, finally crossing the threshold into cryptocurrencies. Thus, Fidelity became the first Wall Street incumbent to bridge crypto with the traditional market.  

At the time of writing this article, ICE-backed Bakkt is already on the verge of launching Bitcoin futures (the delay was allegedly caused by the government shutdown). Bakkt’s long-anticipated Bitcoin futures offer trading and hedging opportunities for Wall Street sharks.

Nasdaq, the world’s second largest stock exchange by daily trading volume, is expected to launch Bitcoin futures in Q1 2019. Notably, the New York Stock Exchange (NYSE) also decided to step its game in the Bitcoin futures niche by rolling out its own product. However, before these contracts can be offered to retail investors, they have to be given the green light by the US financial watchdog.

Adapting to the digital world

In 2019, the face of money will continue changing, and it’s not a huge reach to suggest that cash could become obsolete in the nearest future. PayPal, Visa, and other global payment services actually represent digital information. Cryptocurrencies are simply the next logical step given that they represent the first form of digital money.

The idea that cryptocurrencies will eventually replace fiat sounds a tad futuristic. However, one has to recall the quick rise of smartphones (there are around 2.5 bln smartphones in the world), which can serve as a one-fits-all storage solution for cryptocurrencies. The Samsung Galaxy S10 leak shows that the soon-to-be-released smartphone already has a built-in Blockchain KeyStore app.

Bitcoin is still number one despite criticism

Why invest in Bitcoin? Yes, it is natural that Bitcoin, like any other disruptive technology, is currently facing harsh criticism. For instance, the president of Western Union stated that the telephone had many shortcomings in 1876, and it couldn’t be considered to be a viable means of communication.

Bitcoin obituaries keep rising, but the coin, as you can see, is not going anywhere, and its fundamentals are actually becoming stronger. Generation Z could turn Bitcoin into the currency of the future. Guess who won’t be part of this future? Obviously, those who fail to buy crypto in 2019.

Bitcoin is very scarce

Of course, there are plenty of other options on the table, but Bitcoin is the ultimate OG coin whose hegemony has remained untouched over its ten-year run. Coinbase, the San Francisco-based crypto unicorn, has more users than the total Bitcoin supply, which is limited to 21 mln. The scarcity of Bitcoin will continue increasing while the number of BTC owners will actually decrease. Bitcoin holders are also scarce — less than 5 percent of addresses hold more than $1,000 in crypto. If that’s not enough, you should also take into account the fact that Bitcoin’s total market cap represents roughly 0.006 percent of the total world assets.

No one can say for sure whether it is too late to invest in Bitcoin. However, 2019 could be a nice opportunity to secure your place in the sun when in the imminent era of digitalization arrives.

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Bitcoin can act as a store of value

With the trade war between the US and China and the looming global economic crisis, people turn to digital currencies as a source of stability. That explains the skyrocketing popularity of Bitcoin in the Latin American region, which is mostly plagued by economic woes.

A recent JPMorgan article vividly shows that it cannot act as a hedge asset given its price volatility, but one has to take into consideration the fact that Bitcoin is not controlled by any centralized body. On top of that, it doesn’t have to be transported in its physical form like gold. Learning how to invest in Bitcoin today could make it much easier to fight the financial turmoil.     

Bitcoin follows natural market cycles

There is also a theory that the current crypto rout is simply the result of a natural market cycle, which flies in the face of those who push the crypto narrative. aXpire’s CEO Gary Markham claims that there are actually many similarities between Bitcoin and gold futures – the graph below shows practically the same price pattern. Gold futures started trading on New York’s exchange on Dec. 31 in 1974.   

Is It Too Late to Invest in Bitcoin? Five Reasons to Invest in Crypto in 2019
As you can see, the launch of the futures was followed by a brutal price drop (it took almost two years for the gold price to bottom out). This bearish trend was followed by a ten-fold increase compared to its previous ATH. Taking this into consideration, one could predict the Bitcoin price could skyrocket up to $180,000 when it’s time for another bull run. However, one should also take into account the fact that there are numerous discrepancies between the two markets, which complicate the task of making any concrete predictions:

  1. Many market participants were unaware of Bitcoin futures.

  2. Unlike the precious metal market, the cryptocurrency market is much more competitive with more than 2,000 coins and tokens listed on CMC.

  3. Bitcoin as an investment is more susceptible to different kinds of speculations. Its price highly relies on whales, the industry and, of course, the underlying technology. For example, quantum computing attacks could put a damper on the public-key cryptography that underpins Bitcoin.  

Want to look at a similar price? Then look at the so-called ‘Wall Street Cheat Sheet’, which perfectly displays the oscillation of human emotions. ‘Euphoria’ is the highest point when an investor is willing to go all-in without a modicum of rational thinking.    

Beyond Bitcoin: security tokens saving the crypto industry?  

Security tokens (STOs) represent a pivotal opportunity for the mainstream adoption of cryptocurrencies given that they combine the best from both worlds: an emphasis on regulations is combined with more liquidity and more funding opportunities. They have numerous advantages over traditional financial assets while simultaneously appearing to be a much safer option than ‘wild west’ ICOs, 70 percent of which failed to exceed their initial valuation.

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Polymath and tZero are the startups that are actively working on the implementation of security token offerings, and these are the companies that you should definitely watch in 2019. U.Today earlier published a tutorial on how to create your own STOs with Polymath.     

tZERO is an SEC-regulated Blockchain subsidiary of the e-commerce behemoth Overstock. The security token exchange platform went live on Jan. 29. As of now, tZERO will only operate during Wall Street hours given that they have to work in sync with broker-dealer Dinosaur. However, in the long run, they want to allow their clients to trade around the clock.  

There are those who are shooed away by the word ‘security’, supposing that it would bring greater scrutiny to the space, but, as mentioned above, that could actually be a significant advantage over ICOs. Their enhanced legitimacy could trigger a ripple effect and attract many institutional investors on board.
On top of that, STOs could be a major catalyst for cryptocurrency growth in 2019, a spillover effect.  Tokenized securities have the potential to bridge companies globally, substantially expanding the community of investors.      

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SegWit Explained: What Is Bitcoin's Segregated Witness?

SegWit Explained: What Is Bitcoin's Segregated Witness?
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Segregated Witness (SegWit) is an implemented protocol update that solves the problem of the Bitcoin’s blockchain transaction malleability. The point is in one of the transaction components. The first part is the Basic information (the sender, the amount, the recipient). And the second part — Witness — carries a special cryptographic signature (code). This code is a confirmation of the virtual transaction in Bitcoin currency.

Witness’ signature creates difficulties for the blockchain because the form can be changed after the appearance in the block. Bitcoin will still reach the addressee, but the construction of new transactions will be complicated because they all go along the chain. Unconfirmed transactions slow down the speed of new ones, reducing the overall Bitcoin network performance due to pulling data from a past virtual transaction.

The current Bitcoin protocol makes it difficult to implement large-scale updates, as well as to conduct fast transfers. The problematic network feature is called the “transaction malleability”. Against this background began the movement for the introduction of SegWit.

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The goals of SegWit

Segregated Witness must restore the Bitcoin network and adapt the blockchain technology to new realities. The main task is to solve transaction malleability and scalability. SegWit optimizes the transaction process and creates conditions for the subsequent increase in virtual block size. SegWit has to solve such problems and questions:

  • If Witness signature is segregated from a block of Bitcoin increases size and bandwidth of the entire network.

  • The transaction size is reduced by 2 times.

  • Reducing the blockchain size, which saves disk virtual space for nodes.

  • Starting and synchronization of nodes speed up significantly.

  • The enhanced spam protection mechanism of Bitcoin currency.

It follows that SegWit addresses the most important aspects for Bitcoin: scalability, protection level, transactions speed, and interaction with new protocols.

The story of Segregated Witness

The first talk about the need to modernize Bitcoin’s protocol and about possible ways to solve the transaction malleability problem appeared in 2012. Bitcoin-Core developers Russell O’Connor, Luke Dashir, Gregory Maxwell and others became initiators. Active actions for the currency began in the summer of 2014, when Maxwell, Pieter Wuille and cryptographer Adam Back launched the blockchain research company called Blockstream. In this environment, they found a solution to Bitcoin’s problem. It was decided to separate special cryptographic signature from the main part of the transaction. They called this function Segregated Witness.

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In parallel with Segregated Witness, the idea of ​​optimizing Bitcoin’s blockchain by increasing the block size (the default is 1 megabyte) appeared. It could be realized only through a hard fork — a rigid network separation through the introduction of changes incompatible with the current protocol. SegWit, on the contrary, was a soft fork or partial update of Bitcoin’s protocol. To implement it, the Witness’s signature must be segregated in a new part of the virtual block. And its anchor (Merkle Root) recorded in the transaction of miners’ fees. As a result, more space remained in Bitcoin’s block, and its size increased without actually increasing. This result allowed us to solve the problem of the Bitcoin network scalability, which was also quite acute.

After the appearance of the second idea, a real war broke out, including among the developers of Bitcoin currency. Miners and pools couldn’t come to a consensus from 2015 to August 2017. As a result, SegWit was accepted and activated. A special code called BIP91, developed by Bitmain engineer James Hilliard, turned out to be the best compromise among all the proposals received over several years.
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The main advantages of Segregated Witness

The list of benefits which will be received by the Bitcoin network with the introduction of SegWit is very large, we focus the main ones:

  1. The third party will lose any options of signature’s changing, which will facilitate the development of new smart contracts.

  2. Dividing special cryptographic signature from Basic data will significantly increase transaction size and Bitcoin’s blockchain bandwidth, and the average virtual block size will be 1.7-2 MB.

  3. With Segregated protocol, transactions in Bitcoin currency will remain available to participants who have accepted SegWit, and those who refuse to do so. At the same time, users with an updated protocol will work with smaller commissions.

  4. The adoption of SegWit greatly simplifies the implementation of new soft forks, allowing to introduce new ideas to improve the security of Bitcoin currency.

  5. The block validation rate and transaction security will increase due to a change in the signature hash function from linear to exponential.

  6. A segregated signature will reduce the currency’s charging fees.

  7. SegWit will have a positive impact on the Bitcoin ecosystem here and now, as well as create a springboard for further development.

Arguments against SegWit

Even today, Segregated Witness is not fully accepted by the Bitcoin network. Sceptics believe that this will take years because the number of nodes has already exceeded 10,000. An increase in the number of participants and a virtual transaction will result in a Bitcoin’s block size of 2 MB is small for the needs of the ecosystem.

Partial centralization of Bitcoin’s system due to the implementation of the SegWit protocol will increase the number of unconfirmed transactions, which will strip the network and make currency vulnerable to hacker attacks.

Some Bitcoin developers and pools believe the adoption of SegWit is dictated by the economic gain of Blockstream, which owns the Lightning Network protocol. Its technical implementation in the Bitcoin network without Segregated Witness is almost impossible.

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Will the time come for SegWit2x?

Speaking about the implementation of Segregated Witness and Bitcoin currency, it is impossible not to mention the postponed indefinitely SegWit2x. The agreement was the result of heated discussions and a search for consensus. It was decided to make a hard fork, after which the block size should increase to 2 megabytes. The split was scheduled for mid-November 2017. In fact, Bitcoin would split into two networks with its own coin, rules, signatures and standards.

However, the idea was not destined to come true. Firstly, the negative attitude of the developer community and the launched NO2X campaign did not play into the hands of the “Segregated” protocol. Secondly, BIP91 was implemented earlier and it was successful.

As a result, on November 8, 2017, the complete closure of the project was announced. But there were people who positively evaluated the results for Bitcoin. For example, the head of, Peter Smith, who initially supported the Segwit2x idea, spoke as follows:

“We’re relieved. The goal of the NYA was to bring the community together and keep the majority of the users on the same chain for at least a little while longer.”

SegWit usage metrics
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Results for Bitcoin and blockchain

From the moment of implementation of Segregated Witness, a year and a half has passed, but the protocol is not accepted by 70%. Many large services have not yet implemented it into their processes. However, positive changes are already visible, especially for ordinary users. Now the average transaction cost with confirmation within 20 minutes, according to Bitcoin Core Fees, is estimated at 5 satoshi/byte, that is, about $ 0.08 for the entire virtual transaction.

Spam attacks on the Bitcoin network have also stopped, the mempool remains free, and the average block size has exceeded 1 MB. In addition, the activation of SegWit has opened the doors to the implementation of new solutions and prospects for Bitcoin and cryptocurrency in general.

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