Why I’ve Changed My Mind on Bitcoin
by Nick Maggiulli
I highly suggest consuming the full piece here (7 min. read time)
“As Paulo Coelho wrote in The Alchemist: Everything that happens once can never happen again. But everything that happens twice will surely happen a third time,” Nick references.
“What the Bitcoin bulls were right about was increased adoption and the ability of many Bitcoin owners to hold (‘HODL’) even as prices rose dramatically. These two effects (more demand from buyers and reduced supply from sellers) have helped to boost Bitcoin’s price and cement it as a legitimate asset class within the investment community.” — Nick Maggiulli
People who were skeptical of Bitcoin before its recent price surge, told themselves that they’d buy Bitcoin if it dropped to the $1,000-$2,000 range. This range keeps going up for the skeptics. “…every time the price goes up in the future, these ‘mental buy limits’ go up as well, increasing the likelihood of Bitcoin’s future survival,” Nick explains.
“…both the price of gold and the price Bitcoin are based around one thing and one thing alone—belief. The belief that these assets will have value in the future.” — Nick Maggiulli
Nick compares Bitcoin to the early years of the ability to invest in gold. “Though Bitcoin is unlikely to follow a similar path to gold, it is likely to exhibit similar behavior. This means that Bitcoin will continue to have huge run ups in price followed by violent crashes. Crashes that may last years (and possibly decades) in the future.” — Nick Maggiulli
“…if Bitcoin’s market capitalization were to match that of gold, it would be worth over $500,000 a coin. This is why some investors are so bullish on Bitcoin.” — Nick Maggiulli
My two cents: That last fact is pretty mind-blowing. As an investor, the question becomes will Bitcoin ever reach the same market capitalization as gold? Nobody knows the answer to that question, but choosing to invest in Bitcoin means you’re willing to find out. I’m willing to find out. Albeit, I barely put any money in, although many people don’t realize you don’t have to buy 1 whole Bitcoin to invest. You’re able to buy $100 worth or whatever amount you’re comfortable with and still “own Bitcoin.” You’d just be a partial owner alongside tons of other partial owners.
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