It was November 9th 2021, at precisely 6 PM, Central Time when the Price of Bitcoin hit its all time high of $69,000. At the time many were asking; is it too late to buy Bitcoin, while others were saying, Not even, this price will turn out to be a bargain of monumental proportions.
Then, 220 days after the mania of ‘the all time Bitcoin high’, came Inflation and the onslaught of the Federal Reserve’s tightening monetary policy.
But, the biggest shoe to drop which had direct implications on the Bitcoin price fall, was the complete and utter collapse of Do Kwans, Terra USD.
Terra USD was an Algorithmic Stable Coin, which was supposed to be pegged to the U.S Dollar 1 for 1, and prove to the nay-sayers that Yes, Bitcoin could one day become a reserve currency.
Problem was, as with most bank runs in history, there weren’t enough reserves to keep the price pegged to the US Dollar. So, Terra USD went to zero, and managed to bring the rest of the Crypto Market down with it.
The unforeseen benefits of the Crypto Collapse.
Yes, I said ‘benefits’ and ‘collapse’ in the same sentence; seems antithetical, but let me explain my thesis.
There was a lot of mania in the crypto market, and ‘Up’ was the only direction many investors believed it would go. Which is unsustainable for a global market.
This philosophy causes companies like Voyager Capital and Celsius to take on un-necessary risk, and ultimately find themselves fighting for their own solvency. Even worse, their lack of ‘risk management discipline’ led to the eventual collapse of investors savings and an erosion in confidence, myself included.
A hot stove proves to be ‘the great equalizer’ between believers and cynics.
Getting burned provides value in life moving forward. Burning your hand on a hot stove, innately makes you more respectful and conscious when around a stove; hot or cold.
Now, I’m not advocating for everyone to go out and get burned by a hot stove just to learn a lesson, I’m merely using it as a satirical frame of reference.
The crypto market was a hot stove everyone thought was cool, but it burned many. Now, companies taking on too much risk will be forced out of the market, and the developers will move over to the promising projects, such as Ethereum, and Cardano.
If you want to learn more about these projects, here are a couple posts I’ve written about them:
In agriculture, we like to refer to the forcing of poor performers out of the market as; ‘separating the wheat from the chaff’. Once complete, the wheat seed can then take on new life and go on to provide value in its new form.
Washington debates Cryptocurrency Rules with sights set on Stable Coins
Good policy, must come out of Washington D.C. for the market to thrive. Good Crypto Policy should remove barriers and spur innovation while protecting its citizens. Until this happens the crypto market will not become ‘mainstream’.
Perhaps because of the aforementioned Terra Luna Collapse, the ‘Shepherds’ in Washington have their sights set on the $185 Billion Stable Coin Industry.
Democrats and Republicans are on the same page when it comes to setting up Stable Coin Safeguards, but it’s the nuanced details they cannot agree on.
They have to get crypto regulation correct, the first time!
Imagine if politicians placed onerous regulations on The Internet back in the late 1990’s, because they didn’t understand it, and couldn’t see the future of what it could become. Where would we be now that, literally everything is internet based?
But, if they can put legislation in place which promotes growth in the industry, then katey bar the door! Institutional Money, will swoop in and move the market forward to unprecedented levels.
The Institutional Money says it’s not too late to get into Bitcoin?
There are 21 Trillion reason’s Blackrock, the worlds largest Asset Manager, believes it’s not too late to invest in Bitcoin.
Yes thats Trillion, with a T. This is the amount of assets under management that Blackrock has in its Aladdin Software. Aladdin stands for Asset, Liability, Debt, and Derivative Investment Network. It’s a proprietary system whose job is to keep an eye on the overall markets and stop anything from going wrong. With that kind of capital, you can single-handedly move the markets and change ‘Wrong’ to ‘Right’. Or, vise versa.
Blackrock must be under immense pressure to allow its investors to get access to Bitcoin. Which is precisely why Blackrock has teamed up with Coinbase.
Coinbase Prime will be the on-ramp to Blackrocks deep-pocketed institutional investors, paving the way for access to Bitcoin and other Cryptocurrencies.
The Blackrock-Coinbase Partnership
On August 4th, 2022; Bitcoin and Coinbase’s trading prices were resuscitated when Blackrock announced it was partnering with Coinbase.
This news provided rocket fuel for Coinbase’s stock price, setting in motion a 31% price increase in 6 days.
This is a highly anticipated partnership and if the tea leaves are correct, it will usher in sovereign wealth funds, Pension Funds, and institutional money from all over the world.
Here are 3 highly respected Investors who believe it’s not too late to buy Bitcoin.
Former CEO of Microstrategy, Michael Saylor says:
If the deniers are wrong and the skeptics are wrong — and it’s pretty obvious they’re both wrong at this point — it’s not going to zero, and if it’s not going to zero, it’s going to a million.
CEO of Digital Currency Group (DCG) Barry Silbert has stated:
He looks forward to selling Bitcoin to Berkshire Hathaway once it hits $100,000.
According to Ray Dalio:
Bitcoins value might be down, but its potential is very much alive and worth investing in.
Ray Dalio advises investors should put 1-2% of their portfolio into Bitcoin
So, should I buy Bitcoin?
I am not a financial advisor, nor is this financial advice, nor do I ever give financial advice or suggestions on this site. This site is for informational and entertainment purposes only.
Bitcoin is not for everyone. Bitcoin is extremely volatile, mainly because it’s a new asset class which has only been in existence since 2009. Here is the Bitcoin Whitepaper written by its founder, Satoshi Nakamoto, if you want to do more research.
As with any investment, it’s important that you understand what you own, which is why I would have a firm understanding of Bitcoin before putting any money into it. The Bitcoin Whitepaper is a great starting point.
After reading the Whitepaper, I would suggest watching hours of Youtube Videos to further your understanding of Bitcoin. Here are some great educators on the subject of Bitcoin:
You will learn more about Bitcoin in one hour by watching Andreas, than watching 50 hours about it on CNBC. He is entertaining and very knowledgeable.
Robert is articulate, edgy, and a very philosophical and forward thinker. His belief is Bitcoin is the future, and truly the only ‘sound’ money on earth, nothing even compares.
Roger was acquiring Bitcoin when it was a mere dollar. His company Memorydealers, was the first established business in the world to accept Bitcoin as payment. He knows a thing or two about Bitcoin.
Retiring at the age of 33 didn’t stop Lyn from learning all she could about the investment world. She has a keen understanding of all assets, but in particular equities, bonds, precious metals, and of course Bitcoin.
Reading up and watching these ‘Bitcoin Evangelists’ will give you a fundamental understanding of Bitcoin, the Asset. After studying them, only then will you have a keen understanding and can answer for yourself; Should I buy Bitcoin?
If you reached the conclusion and decided its time to buy, How do you know when it’s the best time to buy Bitcoin?
The market for Bitcoin is always open, unlike the US Stock market which is only open from 9:30-4:30 EST Monday through Friday.
It’s always open because it’s a Global Asset, and serves all time zones throughout the world. You can buy Bitcoin on Sunday at Midnight, if the thought of it is keeping you up at night.
As far as when is the best time to buy Bitcoin, check out my post: How to make a $100 a day trading Bitcoin. In it, I did a 10 year analysis on which days were better for buying and which are better for selling. You can Check that out here.
In Conclusion; we are a mere 13 years into the Bitcoin Experiment, and it’s already hit a market value of 1 Trillion dollars. If the Bitcoin market value doubles to 2 trillion in the next 13 years, each coin will be trading for close to $102,000 each.
Is it too late to buy bitcoin, Nah, I’d say it’s just getting started.