Bitcoin, the largest cryptocurrency by market value, hit an all-time high in October 2021. It topped $66,000 surpassing its previous record of $64,899 set in mid-April 2021.
I heard about bitcoin in 2017, that was about 4 years. During that time, bitcoin had a lot of hype, hitting its all-time high of 20k. However, many people cautioned that it was purely speculative and people were saying that Bitcoin has no fundamental value. I did not do anything back then.
Fast forward to 2020. I became interested in this digital asset after listening to a podcast interview with Zach Prince, Founder of BlockFi. That's where I found the development of the cryptocurrency space fascinating and interesting.
I started off with opening an account with BlockFi and bought $300 worth of Bitcoin. The price was between 14-15k. Then I gradually added more money as Bitcoin started to move. I have also opened up account with other exchanges to invest in Bitcoin.
Needless to say, my investment in Bitcoin performed the best in the past year.
Now, this video is not about bragging about my investment returns. I just want to share my views on this crypto asset and what I intend to do.
I cannot help you decide whether to buy or not because I am not a financial adviser. You should consult a professional consultant for financial advice. What I shared here are for entertainment purpose only.
Personally, I believe in Bitcoin as a store of value. I believe the cryptocurrency will gain value over the long term because the supply is fixed, unlike the supplies of fiat currencies such as the U.S. dollar or the Euros. The supply of Bitcoin is capped at just under 21 million coins, while central-bank-controlled currencies can be printed at the will of politicians. Many investors expect Bitcoin to gain value as fiat currencies depreciate.
I am also intrigued by the conviction of several people like Michael Saylor, Raual Pal, Anthony Pomp, Robert Breedlove and Cathie Wood.
Michael Saylor, CEO of MS, is one of the most vocal bitcoin bulls in the crypto industry. He was the first CEO to use the cash of the company to buy bitcoin. According to Market Watch, the company said it now holds about 114,042 bitcoins that were bought for $3.16 billion, at an average price of $27,713 per bitcoin.
I really admire him for his vision and his gutsy move.
After the move from Microstrategy, other public traded companies start to follow suit. Tesla, Square, Galaxy Digital Holdings, Voyager Digital and many more companies have bought millions of dollars worth of bitcoins under their balance sheet.
How about the adoption rate? Bitcoin‘s current adoption rate is phenomenal. Paypal, Square and many more companies now accept Bitcoin as payment.
In 2021, El Salvador became the 1st country in the world to make Bitcoin a legal tender; Paraguay and other countries look to follow suit. El Salvador is also the first and only country to have Bitcoin in its treasury. As of September, El Salvador has 700 coins. President Nayib Bukele has not been shy about announcing his purchases on Twitter. Will there be more countries following this trend? I believe it is just a matter of time.
Just recently, Mastercard is preparing to announce that any of the thousands of banks and millions of merchants on its payments network can soon integrate crypto into their products. That includes bitcoin wallets, credit and debit cards that earn rewards in crypto and enable digital assets to be spent, and loyalty programs where airline or hotel points can be converted into bitcoin.
If the rumours are true, Amazon could accept bitcoin payments later this year. This could drive the price of the cryptocurrency upwards.
Amazon is also said to be looking at launching its own cryptocurrency.
This comes after Amazon posted a job advert looking to hire someone to develop its digital currency strategy.
Amazon isn’t the only tech giant to be branching into cryptocurrency; there are rumours circulating that Apple will use some of its large cash reserves to invest in bitcoin.
U.S. regulators exploring how banks could hold crypto assets - FDIC chairman
How about the banks?
We could also see banks holding crypto assets in the near future. A top U.S. bank regulator said U.S. officials are looking to provide a clearer path for banks and their clients that are looking to hold cryptocurrencies, in order to keep control over the fast-developing asset.
Jelena McWilliams, who chairs the Federal Deposit Insurance Corporation, told Reuters in an interview on Monday that a team of U.S. bank regulators is trying to provide a roadmap for banks to engage with crypto assets.
That could include clearer rules over holding cryptocurrency in custody to facilitate client trading, using them as collateral for loans, or even holding them on their balance sheets like more traditional assets.
"I think that we need to allow banks in this space, while appropriately managing and mitigating risk," she said in an interview on the sidelines of a fintech conference.
This is going to be huge for the crypto space.
I remembered in 2017, there was one guy in his 20s, telling to get my feet wet by trading bitcoin. I knew he was trading for the quick bucks and doesn't care about the fundamentals. I ignored him.
Now, it is not about the fast profits. I believe Bitcoin is a real deal after the recent developments that I stated earlier. There are many predictions on the future value of Bitcoin. The range is between 100k to even 12million per bitcoin. Nobody knows the exact value. I will personally DCA into Bitcoin as I believe the valuation will definitely hit 6 figures in the long run.
Should you invest in Bitcoin?
After investing in Bitcoin for almost a year, I have personally experience the volatility of the price movement. There will be times when the asset drop 50% in value.
Owning some Bitcoin can increase your portfolio's diversification since Bitcoin have historically shown almost no price correlation with the U.S. stock market. If you believe that cryptocurrency usage will become increasingly widespread over time, then it probably makes sense for you to buy some crypto directly as part of a diversified portfolio. This is not financial advice.
You would also need to have the stomach to withstand the volatilityof the price movement. I would urge that you should invest the money that you don't need for the next few years. Do not ever go all in or borrow money to invest in crypto.
So how to buy Bitcoin?
There are many exchanges that you can choose to buy your cryptoassets. I have tried Binance SG, Crypto.com, BlockFi Coinbase. Recently I have discovered FTX.com and I think FTX is the best when it comes to the fees and their platform features. So if I were to pick, I would choose FTX.
Wrapping up, with governments printing out more money than ever before in light of the pandemic, investors are looking for alternative investments to hedge against inflation. Many are turning to Bitcoin to do so, facilitating adoption of cryptocurrency over the long-term.
Is Bitcoin a good investment? It can be, so long as you do your research, have the conviction and invest wisely.
Let me know in the comments below having you invested in Bitcoin or intending to do so?
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