My thoughts on Bitcoin
The best performing asset over the past 10 years.
Like many, bitcoin first grabbed my attention when it peaked in late 2017 at a staggering $20,000 per coin.
While I admit I didn’t know much about it —
I did know it was the “new kid on the block” (pun intended) and people were making a lot of money by owning it.
And just as fast as the rush of people came into the space, the rush of people left as the price corrected back down to almost $3,000 per coin.
Originally I invested a couple hundreds bucks around $14,000 because you know? We’re getting rich.
Well that turned out to be the best money I’ve ever lost (and now recovered) because it got me hooked. I wanted to learn why this so-called cryptocurrency was the future.
Here’s what I’ve learned over the past three years and believe to be true:
- Bitcoin an incredible store of value
What gives anything value? Scarcity and demand. Examples include, foreign cars, Supreme brand, exclusive shoe drops, trading cards or even a line at a nightclub.
Basically anything where the supply isn’t increased as demand is.
There can only ever be 21 million bitcoin and the demand is increasing every day. I don’t know about you but, I want to own things with limited supply.
2. The world needs a way to transact value quickly and anonymously
The traditional financial system makes paying people and getting paid hard. You can only send and receive money within your country, it takes a relatively long time and it’s expensive to do.
As the internet has created a world without borders we need a financial system that supports it.
With bitcoin you can quickly, cost effectively and securely send money around the globe peer-to-peer with no middle man (bank). I think that’s so cool.
3. Traditional fiat currency can and is manipulated
This only clicked for me recently —
Earlier this year as the federal reserve printed and injected three trillion dollars into the economy.
Back to the scarcity and demand, any cash you had suddenly became less valuable when this happened. Why? Because the supply was increased.
We can use Van Gogh’s The Starry Night to illustrate this concept. A quick google search says the painting is worth $1 billion dollars.
Why? Because it’s a 1/1 painting. Now imagine if tomorrow another 100 Starry Nights by Van Gogh magically appeared. All of the sudden the value of the original would surely decrease.
The same goes for cash. As more cash is put into circulation the less valuable it becomes.
4. The next bull market
While I personally believe we are in the early days of the next bull market, I have new expectations for bitcoin.
I no longer see it as a get rich quick scheme but an accumulate wealth over the next decade tool.
Like the subject states, bitcoin has been the best performing asset over the past 10 years, I don’t think that trend is suddenly going to stop.
If you want to learn more here are some of my favorite resources to follow:
Anthony Pompliano:
https://twitter.com/APompliano
Plan B:
https://twitter.com/100trillionUSD
Benjamin Cowen (Into The Cryptoverse)
