It can’t be confiscated
The 2008 financial crisis has taught us that financial institutions are not immune to failure. The bank can freeze your fiat currency, or the government can seize your assets with little to no warning.
Bitcoin is different.
Holding some of your wealth in Bitcoin allows you to maintain custody over your own funds and makes it easy to travel with your wealth across borders.
With Bitcoin, you can be your own bank. As long as you don’t share your private keys with other people, police and government regulators included, nobody can confiscate it. Bitcoin is the largest cryptoasset
It didn’t die in early 2014, when the largest exchange at that time, Mt. Gox,
It survived hackers that stole large amounts of Bitcoin from exchanges.
It survived an 83% crash in 2017 from $20,000 to almost $3,000 as media called Bitcoin a bubble that had burst and left it for dead.
And it didn’t just survive. It became more resilient and robust.
Last year, Bitcoin was the best performing asset class, with a
66% increase in 2021.
Compared to the rest of the crypto market, Bitcoin is the longest-running, with the most robust network.
Fastest adoption ever
According to the
Real Vision data, the internet grew from 1990 to 2000 at 63% a year. At that time, it was the fastest adoption of any technology in recorded history.
In 1997, there were 140 million internet users, and the industry was growing at a 63% rate. Bitcoin now has roughly the same number of users as the internet in 1997. But
it’s growing at 113% a year, which is double the speed of the internet.
At that growth rate, it will have a
billion users by 2024. Bitcoin is better than gold
Lots of people see Bitcoin as digital gold. But Bitcoin is even better.
There is no way the 8 billion people will hold gold. That wouldn’t work. But it works with Bitcoin.
Blockchain technology has perfected the idea of the store of value and fixed all the defects of gold. When given the facts, it’s easy to
realize that Bitcoin is 100 times better than gold. When in doubt, zoom out
Although Bitcoin can be volatile, it has outperformed many traditional assets in the long term. For example, if you held Bitcoin for the last ten years, it
returned an impressive 192% annually. The chart below shows the annual compound returns.
The Lightning Network increased speed
One of the biggest pushes for Bitcoin as a payment solution came after the success of the Strike app in El Salvador, which is built on the Lightning network.
The Lightning Network is a solution built on the pre-existing Bitcoin blockchain, improving its processing speed and scalability. It enables quick, feeless transactions as it processes payments off-chain, decongesting the main blockchain. Such a structure significantly boosts the operating speed and scalability through added layering.
Diversification to the new asset class
In booms and busts, stocks, real estate, gold, and bonds usually move in the same direction. As you can see on the table below, most traditinal performed similarly in the long run. In other words, they are closely correlated and don’t provide any diversification. Bitcoin has come up as a rescue because it is non-correlated and free from politicians and central banks.
Fix the money, fix the world
The early adopters of Bitcoin were visionaries and philosophers. They wanted financial liberty. They saw that big banks playing fast and loose with people’s money triggered the 2008 financial crisis. They saw that governments worldwide bail the banks out using your money to give exit bonuses worth tens of millions of dollars.
Therefore for some, the question
“should I buy Bitcoin?” is less about the price and more about Bitcoin’s philosophy. Bitcoin is a movement. Bitcoin’s fundamentals mean that “big brother” can’t control, censor, or confiscate your money.
Bitcoin is a belief in financial liberty, inclusiveness, and transparency.
In other words, if you fix the money, you fix the world.
It’s not too late to invest in Bitcoin. We are still at an early stage of Bitcoin adoption.
No one knows, of course, if Bitcoin goes to $300,000 this or back to $30,000. But, in the long run, I’m confident it will replace gold and low-yielding debt instruments.
Given the possibility of such high returns, perhaps it would be prudent to have a small amount of Bitcoin, just in case.