If you’re wondering how you should treat Bitcoin, as an investment vehicle, allow me to share with you guys my non-expert opinion.
End of story, thanks a lot for reading.
See you next time.
–this article shouldn’t be taken as financial advisement as it represents my personal opinion and views. I have savings invested in cryptocurrency so take whatever I write with a grain of salt. Do not invest what you cannot afford to lose and always read as much as possible about a project before investing. Never forget: with great power, comes great responsibility. Being your own bank means you’re always responsible for your own money—
Cryptocurrency investment is one of the hottest topics we can discuss today, as there are many different opinions on what the future might hold for Bitcoin.
Due to the regulatory bodies world-wide having different approaches towards the subject, while at the same time Bitcoin being decentralized and not belonging to a single entity/organization, investors usually feel uncertain towards the future use of digital cryptocurrencies.
An important point, however, is that from a money-making perspective, which is what matters at the end to any investor, Bitcoin is undoubtedly one of the strongest profit vehicles since it came to existence – probably the best asset ever created: digital gold.
The Bitcoin Timeline
First we grab a price level, like when Bitcoin was around USD 8200. Now, if you want to understand if that price level is interesting, consider the following: the likelihood of having invested in Bitcoin at any given point in time since its inception while actually profiting from it, is about 97%.
Sounds too good to be true, right?
Except, it’s not.
By doing a rough estimate, we can quickly see Bitcoin has only been above USD 8200 for about 137 days. As it is traded for about 1917 days, there’s a ~ 97% chance you bought Bitcoin when its price was lower than USD 8200.
Of course this also means you only had a 3% chance of selling at the right time.
There’s always a dark-side to everything, right?
My point still stands: if we only take into account price and time, you’re actually way more likely to have made a bet at the right time, than the opposite.
I know these statistics are fun to play with, but they hardly bring you any real value. Knowing when you could have bought and sold it’s important from a learning perspective, although real investor education happens in a most peculiar way; usually, by making wrong bets and suffering through bearish seasons, that is.
What you desire to know is not how much money you could have made. What you, and everyone else, really want to find out is how much you can still make.
And today, that is what I’ll be discussing.
With a few twists, some side-track topics and the usual delightful shenanigans.
Before we go any further, please remember the below warning:
Anyone who tells you they’re not in it for the money are either lying or don’t need to care about money because they have so much of it, diversified over so many assets, their risk is quite low.
Back to what matters.
Is The Future Bright?
Depending on where your political and economic view-point stand, Bitcoin can either be the world’s savior or its demise.
In my humble opinion, as an economist, I think most of us are dead wrong on how we think money works . I won’t go into too much detail about the subject, as I really want to write an exploratory paper on how (I believe) money should be earned and accessed. The point worth extrapolating is that, much opposed to general belief, I do think there are many different ways to redistribute wealth properly and to create incentive systems for everyone being able to earn cryptocurrency.
Seems illogical that the biggest problem in cryptocurrency (adoption) could be easily fixed by creating ecosystems where users earn tokens for doing things.
Literally anything at all.
Part 1: The Bitcoin Market
When we look at how the market has been evolving, since its birth, I would expect this “bubble” like behaviour to continue, maybe indefinitely.
There are many factors which will balance into the behaviour of price, especially market manipulation, regulatory actions and, of course, both institutional money and other financial investment vehicles (like Bitcoin futures or ETFs).
Historically speaking, Bitcoin has been kind to long-term investors.
Short-term investors cannot complain too much, as Bitcoin is one of the most (if not the most?) volatile assets out there.
Plus, I believe smart-money is coming full force, as it usually happens after every Bitcoin bearish season.
Remember what happened after the mini-crash in March 2017?
Want an expert opinion on the real value of Bitcoin and possible triggers for mass adoption?
Check this beautiful piece from Hacked’s one and only, Mati Greenspan.
As with everything in life, there’s the good and the bad (sometimes the ugly too); and Bitcoin is not an exception.
If there are…