Bitcoin Investing 101

By pjain      Published Jan. 10, 2021, 9:35 p.m. in blog Invest   

Bitcoin Market and Top Companies

11 Bitcoin Unicorns

https://decrypt.co/10636/11-blockchain-unicorns-huran-report - Global Unicorn List The list, authored by the Shanghai-based Hurun Report, analyzed tech startups with a valuation of more than $1 billion, but that are unlisted on stock exchanges, with no private equity investment and less than 10 years old.

Bitmain, China - top Bitcoin miner

Bitmain, Oct 20, 2019 bested all other crypto startups on this year’s Global Unicorn List.

Bitmain, with a valuation of approximately $12 billion, topped them all, once again highlighting the importance of Bitcoin mining in China.

Bitcoin Timeline

---- 2020 could it hit 200,000?

  • $50,000 BTIG's Julian Emanuel
  • $50,000 Bloomberg Crypto Outlook 2021.
  • $200,000 Former Adaptive Capital partner Willy Woo a "conservative" estimate for year-end 2021. In mid-November,
  • $318,000 Citigroup told its institutional clients that it sees the potential for Bitcoin prices to rise as high by end 2021.

Timeline and History

YearMo BTC$ Notes
2013 Spiked then prices crashed
2017 20,000 prices crashed after a sharp rally
2018 Worries about hacking risks hurt
2020 Mar Covid-19 and Bitcoin crashed hard in mid-March.
20201100 20,000
20210115 40,000 dipped back to 33,360 by end Jan

2008

Bitcoin was invented in 2008 and launched in 2009, just as world governments were printing money to respond to the global financial crisis. A slew of other digital assets followed.

2020 March - Bitcoin Never faced a recessionary environment from 2008-2020 Covid

From when it was invented in 2008 until March 2020, Bitcoin had never experienced a recessionary environment."

GBTC

Bitcoin Key Factors

Bitcoin is anti-inflationary and anti-fiat currency printing like Gold

Many are buying into Bitcoin hoping it will be an attractive hedge against rising inflation in the second half of the decade.

Cryptocurrencies such as Bitcoin are drawing comparisons to gold, as they're a relatively fixed asset at a time when fiat money printing is growing out of control. Billionaire Paul Tudor Jones says Bitcoin as a better inflation play than Treasury Inflation-Protected Securities (TIPS) and gold.

  • GOLD has been quite volatile. Inflation fears after the financial crisis led to a spike in gold prices in 2011, but when higher rates of inflation failed to materialize, investors exited the gold trade quickly. Nevertheless, the metal, like its digital counterpart, did make new highs in 2020 around $2,070 per ounce; unlike Bitcoin prices, gold has pulled back considerably, now sitting around $1,850.

Less concerns on Crypto hacking and nefarious activity

"One thing I've found interesting versus 2016 and 2017 is nobody's asking about Bitcoin and nefarious activities," he says. "I haven't gotten a single question on that. Obviously, all types of currencies are used for illegal activities. That question seems to have disappeared. To me, that's an indicator of growing acceptance and understanding." - Osprey King 2020

It's possible cryptocurrency is following the playbook laid out in 1914 by union leader Nicholas Klein: "First they ignore you. Then they ridicule you. And then they attack you and want to burn you. And then they build monuments to you."

Risks of Losing Crypto Keys - Lose access to Wallet

Hacking of Bitcoin Wallet

Limited number of Coins - cannot "Print" money

Unlike traditional "fiat" currencies created and operated by a government and central bank, Bitcoin is "mined," or created by people who solve mathematical problems with computing power. Transactions are kept on the blockchain, an encrypted and decentralized ledger that protects the integrity of Bitcoin while also ensuring the privacy of the user.

Bitcoin is limited to a total of 21 million possible coins once it is fully mined. (Fortunately, it can be divided fractionally down to 1/100,000,000th of a Bitcoin, known as a "Satoshi.") It was designed to be a true store of value that couldn't be manipulated.

Not Currency - You Cannot use BTC in everyday life

Major Hedge Funds, Billionaires own Bitcoin

  • Billionaire investor Stanley Druckenmiller says he owns Bitcoin on Nov. 9, 2020.
  • Billionaire Paul Tudor Jones says it "is in the first inning" and that he sees Bitcoin as a better inflation play than Treasury Inflation-Protected Securities (TIPS) and gold.
  • Mexican billionaire Ricardo Salinas Pliego says 10% of his liquid assets are invested in Bitcoin, Nov. 18, 2020.

Dec. 9: Billionaire and hedge fund manager Ray Dalio says Bitcoin has a place in investors' portfolios. Dec. 12: Insurance firm MassMutual purchases $100 million in Bitcoin.


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