Am I Too Late to Invest in Bitcoin?
Finance, Investing - January 12, 2021
Everyone around you seems to be talking about Bitcoin. In the past month, Bitcoin’s price went from $20,000 to $40,000. Looking at the Bitcoin price, you’re probably asking yourself “Is it too late to buy Bitcoin?”
In this video, we answer this question. So, are late to get in on Bitcoin? Well, it depends. If you’re trying to get those 100x Bitcoin returns, you’re too late. The only ones who are probably making those returns are the early miners. Long story short, if you didn’t mine Bitcoin nearly a decade ago, the 100x Bitcoin returns won’t be yours. Now you might change your question to – how to mine Bitcoin or where can I buy a Bitcoin miner? We’ll stop you right there. A Bitcoin miner in 2021 costs over $50,000 an hour in electricity cost alone. That’s after you buy it. Instead of focusing on Bitcoin’s massive rally, we think you should rephrase the question – Am I too late to allocate Bitcoin to my portfolio? This isn’t a Bitcoin technical analysis video, we aren’t giving investment advice or giving any Bitcoin prediction. To answer the portfolio question, we look at a few facts. First, Bitcoin is seen as a hedge against inflation. This brings out the cryptocurrency’s store of value trait. What this means is as everything else is decreasing in value, an asset that can retain its value will be preferred. Bitcoin is seen as that asset. This is happening as there has been an excessive supply of US dollars in the economy. Because of Bitcoin’s ability to retain its value against the US dollar big financial companies like MicroStrategy, Square, and MassMutual, have purchased over $2 billion in Bitcoin since August of last year. You’ve probably heard of the comparison between Bitcoin and gold. That’s because those assets are both stores of values. Gold is preferred by the older investors, but Gen-Z and millennials prefer Bitcoin. This expected demand from the next earning generation is also expected to boost prices. Next, there’s the question of supply. Bitcoin is limited. There can only be 21 million Bitcoin ever in existence, and its supply decreases every four years. But what we think you should focus on from your portfolio’s perspective is Bitcoin’s volatility. Let’s face it, the Bitcoin market is a roller-coaster. However, you can use it to your advantage. In a diversified portfolio, you can regularly rebalance your Bitcoin gains or losses with other assets like equity or debt. So, is it too late to get into Bitcoin? We don’t think so. Economic factors, financial factors, and social factors point to it being a useful investment for your overall portfolio, provided you understand its dynamics, and more importantly, your financial advisor understands Bitcoin. Enjoy the video! Please subscribe to get more videos like this and leave a comment on what you’d like us to discuss next.