The case for Bitcoin
Hello everyone, welcome to my very first medium post. Today, I will be making the case for why you should invest in Bitcoin.
By now I am sure everyone has heard that Tesla has bought Bitcoin. Tesla used 15% of their cash reserves to buy $1.5 billion worth of Bitcoin, the next day the price of Bitcoin rose about 20% resulting in a $300 million increase in the value of the company’s holdings.
MicroStrategy square and Tesla are all public companies that have put Bitcoin on their balance sheet, and these aren’t average companies these are companies that are blowing their competition out of the water and just as the gym routines of champions are imitated and turned into common practice by athletes around the world the same thing will happen with Bitcoin adoption and other companies Tesla also announced that it will begin accepting payments in Bitcoin.
The arguments people make against Bitcoin are beginning to lose strength and soon it will become just another fundamental aspect of the world’s financial landscape. Why? Bitcoins adoption is much farther along than you might think! There’s about 100,000,000 people already invested in Bitcoin and there are more transactions in Bitcoin than there are an Apple Pay, Venmo or PayPal.
Bitcoin transactions take too long
One of the key issues people have with Bitcoin that is frequently brought up would be that the transactions take too long. the argument of Bitcoin transaction being too slow aren’t taking into account the real value of Bitcoin or the nature of how transactions work today.
The real value of Bitcoin is in its capacity to store wealth. If you put $1,000,000 worth of gold and every major Bank of every major city in the world 100 years ago the only gold you would have left would be the gold in the Swiss bank the rest of them would have been lost stolen or destroyed!
Gold is currently the best store of value we have, and it isn’t very good. Bitcoin is better, if you want to understand the importance of bitcoins transaction time you need to compare it to how long it takes to buy $1,000,000 worth of gold and move it to the other side of the world not to how long it takes to use Bitcoin to buy a Cup of coffee. Not only is the value of Bitcoin misunderstood but also the nature of transactions are not what most people realize when you buy a cup of coffee with a dollar the transaction is recorded instantly but the actual money takes up to three days to be moved.
Bitcoin is actually faster than a credit card it just doesn’t look that way yet because it’s a new technology that doesn’t have as many financial services built on top of it. It’s just a matter of time before the same or better techniques are used to make Bitcoin transactions more fluid.
High energy usage
Another issue people have with Bitcoin is the high energy costs associated with mining.
The assumption is that it may be harming the planet because of the power requirements to maintain the system but a fascinating thing has already occurred in most parts of the world it’s already too expensive to use fossil fuels to mine Bitcoin.
Bitcoin is starting to be mined with solar power hydroelectric power wind and thermal energy in the most efficient manner possible because now energy is money as it always was except now it’s tangible. Bitcoin isn’t harming the planet it’s actually creating incentives for more sustainable forms of energy generation in order to bring down mining costs.
How will Bitcoin fit in with financial advisors?
Because the companies that bought Bitcoin are such high performers further adoption is the logical next step.
There’s been a very real risk for any corporate financial officer to make the suggestion for a company to buy Bitcoin but now one of the most successful companies in the world has bought in and the context is changed now it’s a career risk not to suggest it because it’s a safety measure to do what other successful people do if someone doesn’t advise Bitcoin at this point they now have the risk of losing face if someone takes their advice and fails because other smart well known people did it so advising against it is going against the narrative.
Before, you had to be brave to suggest Bitcoin, pretty soon you’ll have to be brave to argue against it.
FOMO and Bitcoin
Let’s talk about how FOMO can actually have positive effects on Bitcoin. It may seem that because Bitcoin has risen so much that it’s a bad investment that many people will continue to buy in because they’re required to buy, institutions and others will buy in because they’re afraid of missing out which is normally a bad idea but in the case of Bitcoin, buying Bitcoin raises not only the value of Bitcoin but also the reputation network effects and overall utility of the asset much like a social network but decentralised and secure.
So buying into Bitcoin at a higher price might not be as dangerous as it seems especially if you’re holding for a long time there will be volatility but it’s a mathematical system with the usefulness that increases exponentially by the amount that people use it.
So, this is not financial advice, but I wouldn’t bet against Bitcoin.