On 10 Sep, 2018In this article, I am going to point out 10 reasons you should buy cryptocurrency. Mind you, this is not financial advice, and you should only invest what you can afford to lose. With that being said, Bitcoin and other cryptocurrencies offers some unique opportunities as an investment.
I will stay away from the simple and well-discussed reasons, such as the “look at the technology” or “its gold 2.0” or “high risk, high reward.” Those tend to be boring. Rather, I want to give you some alternate views. Here are some less talked about reasons as to why to invest in Bitcoin.
Take the Red Pill
Security, happiness, beauty and blissful ignorance of illusion all sound like great things. But that is the “beautiful prison” that is the blue pill. This is what typical investments (stocks, bonds, hedge funds, etc.) bring. Other the other hand, the red pill is Bitcoin. It offers knowledge, freedom, uncertainty and the brutal truths of reality. Its true freedom and uncertainty is what makes Bitcoin such an enticing, yet risky investment opportunity. You are going against the grain if you want to buy cryptocurrency.
“Criminals Use It”
Just because you invest in Bitcoin, it doesn’t make you one. Typically thrown out as a slur, the statement should be viewed as a compliment. Criminals have to be at the forefront of technological advancement. They are the early adopters. Andreas Antonopoulos points out, “criminals were the first to use cars, phones, electricity, and every single technology.” They operate in areas of friction that require them to be on the cutting edge – enter Bitcoin.
Economic Cycles
Historically, the US and world economies have operated in cycles. The National Bureau of Economic Research (NEBR) is the definitive source of dates for US economic cycles. They state that the normal economic cycle (trough-to-trough or peak-to-peak) is on average 5 ½ years. This might come from me reading too much into Peter Schiff. But, the last economic peak we had was back in 2008. Without going into details on the current US or economic climate, we might be due after 10 years. Call me skeptical, but Bitcoin can be a hedge against the world economy.
Inversely Correlated to the Economy
So, points 3 and 4 play off of each other. Bitcoin’s price is not based on a company’s SEC filings, earnings per share numbers, or the like. Rather, it is quite the opposite. People often call it a hedge against the economy. As you will see in point 5, when an economy is crashing, or a national currency is sinking, Bitcoin flourishes.
Venezuela, Turkey, Iran, Argentina, etc.
Bitcoin and other cryptocurrencies can help shield citizens from national economic crashes and currency inflation. The impact that Bitcoin (and other cryptocurrencies) is having to help shield citizens from the devastation of their economies and national currencies is immense. In many instances, it has been a means of survival. If you are in the United States, as I am, it is tough to comprehend the US dollar crashing. Sure, we have had small dips and climbs. Bitcoin is not based off any government. It is not directly tied to any national currency. I hate to be cliché, but Bitcoin can be a great storage of wealth for those in need. Particularly for those in countries of need, which seems to be growing. They buy cryptocurrency as a means of survival.
Worldwide Sandbox
Without the need of banking or access to financial institutions, Bitcoin is accessible to everyone in the world. In essence, that means that 7+ billion people (give or take) are able to buy cryptocurrency and sell it right now. At the end of July, there were only approximately 22 million Bitcoin wallets (as of July 31, 2018). With the lack of financial inhibitors that Bitcoin brings, the worldwide growth potential is staggering.
The Media Doesn’t Know How to Peg It
Is it “The Internet in the Early 90’s?” Is it “Gold 2.0?” Can it be “The Payment System of the Future?” The media doesn’t know which bucket bitcoin and blockchain fall into. The great thing is that Bitcoin exhibits characteristics of those three, and much, much more. Looking back at the videos of the news covering the early days of the internet is quite funny and relatable to Bitcoin now. Very eerie.
The Brain Drain
This one is more surrounding the blockchain technology than its price. Although, it is worth mentioning. The potential of blockchain and cryptocurrencies has caught the attention of many of Wall Street’s brightest minds. “Blockchain and crypto haven’t just been adopted by Wall Street institutions, however. The blockchain sphere has taken something from Wall Street as well – its talent.” Wall Street is synonymous with money, and predicated on making it. So many high-level Wall Street minds heading into crypto should not be understated.
The Bubbles Keep Getting Bigger
If you have done some research on Bitcoin’s price history, you will have noticed that this is not its first bubble. We also will likely have more. There have been the bubbles of the past: 2011’s Mt. Gox hack, 2013’s China ban, and the one that started at the end of 2017. However, the peak of each bubble has continued to grow exponentially, the first peaking at ~$21, with a crash down to $2.30 (~89% drop). The second bubble peaked at ~$1,150, with a crash down to ~$235 (~80% drop). Now the 2017 peak was at ~$20,000, and we are currently sitting at $6,550 (67% drop). Can we see it drop further? Absolutely. However, do I believe that next peak will be even higher? Yes. (Here is a great historical price and event tracker for Bitcoin.)
Millennials
Although often naïve, millennial opinions can provide a glimpse towards the future. A recent survey showed that half of American millennials are interested in using crypto. Other studies have shown that millennials are “less likely to invest money in the stock market than are other generations.”
