Investing in Bitcoin & Crypto Currencies
Crypto Currency has been loved and loathed in equal measure recently. The old establishment loathes it, the disenfranchised and young keen followers of it.
For those of you that are not familiar with Crypto Currency it’s worth taking a view of the video clip below:
The phrase of : “This Time it’s Different!” is often banded about immediately in an ironic manner to mean it’s not different and it will all end in tears. For me, I agree it’s not different and it will all end in tears, for the establishment that is.
Life and products go round in cycles and the likes of Bitcoin means it's a natural derivative of money.
The establishment likes to hark towards Bitcoin’s early use in terms of the dark web and crime; casting aside the role CASH has played in facilitating crime.
Sure it has a history of it, but as awareness broadens out so too the demographic of the people using the currency and for different uses.
It is my firm belief that Bitcoin and Crypto Currencies are about to be big , very BIG and we are at the start of a long climb towards acceptance of the currency as a function of money. That is not to say it will replace fiat money, not in my lifetime, but crypto currency will be as mainstream as the email is today complementing postal deliveries as an efficient, expeditious and effective means of communication.
As recently as this week, the Financial Times were stating that the introduction of Bitcoin futures was simultaneously bringing Bitcoin into the mainstream, while also being the cause of it’s demise. Some say it was more than coincidental that the “Pump and Dump” of Bitcoin to it’s peak in 2017 of $20,000 was a major contributor to this allowing people to short the coin in very large volumes than previously.
Yes, to the uninitiated people forget that we have been here before. Back in the day in 2014 ,when the debacle of Mt Gox unfolded close on 70% of their Bitcoin disappeared over night. At the time Mt Gox was the largest Bitcoin exchange in the world, it represented 4% of the total Bitcoin in circulation. The impact of this and the commentary of the time is worth revisiting:
Yet from around $200.00 back then it has risen to over $8,000 now. How many assets do you know of that have appreciated by 4,000% within 4 years? Not even property has surpassed that!
The fact is, that all the hype about Bitcoin and Blockchain will become real very real and within the next 5 - 10 years.
Having listened and watched the News commentary of the time back in 2014 have a look at what Mount Gox looks like now on the price chart.
NB: The Mount Gox episode Feb 2014 .
So much for expert’s prediction and opinions.
With increasing awareness of this phenomenon so will the price continue to increase with the volatility of the market sentiment. At the moment the public are being advised not to participate and those courageous or foolish enough to do so find it opaque to obtain.
When participation becomes easier so will the price increase expenditionally.
Then the other unique factor to the this asset is the existing barrier to entry in terms of “How to Regulate it”. Resistance to the adaptation of Bitcoin or Crypto Currency is futile. Bitcoin and crypto currency came into existence in an unregulated environment so the establishment will never be able to have undue influence over it.
The net effect of this is, that it is holding back institutional investors. Yet a high percentage of those young traders, proprietary trading firms and hedge fund managers personally own some form of crypto in their own portfolio. It has been said around 5 % have ownership. And who would not if you are earning good salaries and bonus and have spare cash to throw at an investment that has given holders a 4,000% return in the last 4 years. There will a time when Crypto Currency Asset managers or Digital Wealth Managers will come into their own, it’s happening now.
What do you think will be the effect on the price of Bitcoin and crypto currencies once the amber light turns to GREEN ON, for institutional investors? In the old days it was called FRONT RUNNING, but this time it will be on a massive scale. All those fund managers and traders will have a vestige interest in pouring pension and municipal funds into Bitcoin and Crypto Currency. For private investors in small companies that operate in this sphere it will present a fantastic opportunity.
At the same time accessibility will be much easier for mainstream investors to get involved. And that involvement will occur once the next big CORRECTION happens that will rival the great RECESSION of 2008.