I think the key takeaway here is to just focus on maintaining a core long-term holding.
This will be the greatest macroeconomic investment opportunity in human history.We have never seen anything like this before - a new intersection of finance and advanced technology: the blockchain.
You don't want to be on the sidelines or on the wrong side of a trade when it unfolds.
For a global asset, the current Bitcoin market cap of ~700 billion USD is relatively small. By way of example, the total value of US 100 dollar bills and the total value of Euro 100 dollar notes is a few trillion on their own. You have to consider the size of the potential economy that Bitcoin might serve in the future - which is undoubtedly global in scope.
People think gold is the only store of value out there. But people also use fancy artwork, real estate, cars and collectibles to store value - that's a hundred trillion+ market for the primary purpose of parking money. If Bitcoin ends up being just 1% of the global store of value market, that's potentially $150,000 per coin.
♦ It is scarce like gold, but much more preferred by the millennial generation who are entering their prime income earning years, and set to also inherent massive amounts of wealth from their parents. Millennials are also increasingly critical of central bank interventionism. In just a decade, the millennial generation is projected to have the highest earning power of all generations.
♦ Incorporating Bitcoin in a modern portfolio can provide an unprecedented level of alpha to give you the investment 'edge'.
♦ Bitcoin has attributes superior to gold including its portability, divisibility, seizure resistance, liquidity, and verifiability. Try sending gold halfway around the world and assaying its purity within minutes, a practice Bitcoin enables with ease.
Will it be a currency? Doubtful. Will it emerge as a digital gold/store of value? Probably, given time.
From a mile away I can see the value transfer towards Bitcoin happening as digital native millennials grow up and inherit wealth. Will they buy more gold like the boomers, or will they prefer something that speaks to their generation personally? Time will tell.
Also prudent to keep in mind that gold has thousands of years of history and consensus behind it. Bitcoin is less than 15 years old. It's doing very well as an emerging asset class.
Ask yourself this: in a world where every developed nation on earth is cutting rates, creating massive stimulus packages and undertaking quantitative easing - where do you park your money? 100% equities? Or 99% equities and 1% Bitcoin? There's no right or wrong answer. It's all down to risk preference.
I see BTC as either going to zero, or going much much higher than current levels. If it succeeds, then it could approach a market capitalisation similar to gold.
