I’m not an investment advisor. So, please do your own research.
That’s a simple question, but it has a complicated answer.
If you can leave it in for 2 or 3 years, Bitcoin would probably be good. If you have a specific date within the next two years when you need to take the money out, it might coincide with a Bitcoin correction. So not advisable.
You would think the subject of money and how to handle it would be taught to everyone. Sadly, no. So, here’s a quick rundown in case you’ve missed it.
Purchasing power means how much your dollar can buy. If you can buy a month of groceries now for $600 and two years later the same groceries cost $1200, your dollars have lost half of their purchasing power! Not good.
According to the US Government Bureau of Labor Statistics, what $1 would have purchased in 1913 (when the Federal Reserve Bank was created) would have cost you $26.57 in October 2020. Put another way, your dollars have lost 96% of their value—purchasing power! (No wonder you feel like the harder you work, the “broker” you get.)
“Economic stimulus” is a fancy way of saying that governments are printing trillions more dollars with no value behind them. This has been done by many governments through history and today, Venezuela, Zimbabwe, Sudan, Iran, and Haiti are using printing presses rather than real production to try to handle their economic problems. This pushes prices up and purchasing power down.
Let me explain with this example. Sally and Jessica make the same amount of money at their work. They both have 4 dollars to spend on a loaf of bread, but there is only one loaf available. Bidding against one another for that one loaf, the most they can pay is $4. Now their economic stimulus checks arrive and they each have $16. Unfortunately, there aren’t any more loaves of bread produced, so they have bid against one another. So that one loaf of bread will cost $16. That is inflation: more money chasing the same number of things to buy.
Few people recognize the cause of the dollar’s decline. This is because most people work for a living. Wage and salary increases help to adjust to the inflation that is created. (Make no mistake. It is created by central bankers. It doesn’t just happen.) So inflation affects savings more than current income.
What would a financial system look like that didn’t include inflation? Better yet, what if it actually made the money saved more valuable instead of less valuable?
Instead of the increasing number of dollars, the number of Bitcoins Is fixed at 21 million. There will never be more. So far, 18.5 million have been created, but the speed of creating the rest of the Bitcoins is cut in half every 4 years. That means it will take 120 more years to create all 21 million. This reduction in Bitcoin production is based on rules set in the original program and can’t be changed. No inflation means the value of your savings will be preserved or grow and not be worth less and less. You can preserve and accumulate wealth.
THE 2017 BITCOIN BUBBLE
The date when Bitcoin production is reduced by half is called the Halving. So far, there have been three: 2012, 2016 and 2020. Each one of these makes Bitcoin more scarce and has historically sent the price of Bitcoin higher … much higher. 2017 saw the price hit almost $20,000.
WHY 2021 WON’T BE A BUBBLE
In 2017 people were seeing the dramatic rise in Bitcoin’s price and wanted to make a profit and then take that profit—convert it to dollars.
This year we’ve seen billionaires and the first public corporations (among them Square and Paul Tudor Jones) buy tens of millions of dollars of Bitcoin as a protection of their savings . They are not going to sell their Bitcoin for a quick profit because they want a store of value for their accumulated savings. They want their wealth protected from inflation and not worth less and less while they hold it. They won’t be dumping Bitcoin like the speculators did after the 2017 bubble. This will keep the price of Bitcoin stable at these higher levels.
*HODL – Hold on for Dear Life = Buying an investment for the long term, not to make a quick profit and get out
*FOMO – Fear Of Missing Out = Everyone else is getting rich and I don’t want to miss the boat on this opprotunity
*HODL FOMO – Fear Of Missing Out on a life-changing long-term investment
*Speculative FOMO – Fear Of Missing Out on a quick chance to get rich
*Escape Velocity – The speed necessary to allow a rocket to escape Earth’s gravity and get into space, used here to mean Bitcoin’s going way, way beyond any previous highs and not come back to this price range
I haven’t posted much with cryptos dropping 70% this year, but Bitcoin appears to have hit bottom. It’s not gone below about $6,000 for a bit over three months. Further support for this is that the last run up of 1000%+ from August to November 2013 started from $100, hit $1,100 and then crashed back to about $200, twice what it started from.
In 2017, it started its run from about $3,000 in August and ran up 700% to about $20,000 in December. So, dropping back to $6,000 matches the past.
Most crypto investors are on the search for new ideas. However, I haven’t posted much lately, so I thought I’d take a look at what other people are talking about.
Clif High is either revered as a guru or cursed as a sham, but these coins look very interesting. Some need no introduction. Some may be brand new. Do your own research. This is his data except where I’ve made comments that are clearly my own.
The question I’ve been hearing from new people to whom I mention Bitcoin is “Can it still go up from here?” The answer is yes, definitely YES!!
Let’s start with some facts
Kraken as of Dec 15): Each of the past few days has produced 50,000 new account registrations and 10,000 new support tickets! Ten times more than last quarter! Number of simultaneous users, daily trades and volume are also making new all-time highs. They are struggling to keep up.
Coinbase added 300,000 new users over the Thanksgiving holiday week. The new additions brought Coinbase’s account total to 13.3 million exceeding the 10.6 million brokerage accounts at Charles Schwab! Over the course of the year they have added more than 5 times the number on their support staff and have seen the number of transactions increase during peak hours by over 40 times!!
Fidelity Investments is the fifth-largest asset management firm in the US with $2.3 TRILLION under management. It has just made an agreement with Coinbase to allow their 26 million individual investors access to Bitcoin. Not only that, but Fidelity allows its 40,000 employees to buy coffee or lunch in the company’s cafeteria with bitcoin and Fidelity has ongoing profitable Bitcoin and Ethereum mining! In fact, the CEO was quoted as saying that operation “is actually making a lot of money.”
To recap, HUGE numbers of new buyers are coming into the market at such a rate that the exchanges are having a hard time keeping up. Add to that the fact that very, very few people actually know how to buy bitcoin and you may agree with me that this market has a long way to run…a long, long way to run.
(Although the recommendations above will most likely appreciate a great deal, I believe my new recommendations will do better in the coming year. So, be sure to scroll down to read the new recommendations. I hope you find these of value, but keep in mind these are for you to evaluate. I’m not an investment advisor. Just a cryptocoin writer sharing my views with you.)
Do not invest more than you can afford to lose! This is vital as the prices go up and down. If you invest more than you can afford to lose, you will be scared at the bottom and sell before the prices recover and go way, way up.
For beginners, start with an amount you can afford to lose and buy Bitcoin. There is a long learning curve to cryptocurrencies. So, start with a small amount in Bitcoin. It is the best known and been around the longest. After you’ve learned to buy, hold and sell it. You can begin to get a feeling for the alternative coins (called altcoins) and broaden your portfolio. Download my book to learn more about Bitcoin and how to buy and sell it.
In case you’re new, I’ve defined “blockchain” here at the beginning, so you don’t get lost.
Blockchain — Every 10 minutes for Bitcoin (shorter intervals for other cryptocoins) all the information on transactions and new coins mined (created) is written in a block of data on all the computers in the Bitcoin (or other coin) network. Each block has a secret code created from all the data of the last 10 minutes plus the secret code of the previous block. Thus the secret codes “chain” these blocks of data together. To “counterfeit” a false block giving a hacker counterfeit Bitcoins, he would therefore have to create an entire false blockchain of 498746 blocks (as of 8:48 am EST). Thus, the blockchain provides tremendous security for digital currency and/or data.
The Expo was exciting! 10,500 people and 300 exhibits covering cryptocurrency and blockchain, the Internet of Things (smart objects in the real world able to interact, such as self-driving cars or voice activated lamps) and artificial intelligence (computer programs that “learn” as you use them, like Google discovering what you search for and feeding you relevant advertising based on that).
It reminded me of the personal computer industry in the mid-1980’s when all the software and hardware was new. There had never been personal computers before. Word processing programs, spreadsheet programs, bookkeeping programs were just being developed for the first time. The industry was booming and the excitement of creation was contagious!
Even though I got back a week and a half ago, I am still struggling to catch up on my emails, calls and so forth. But I did want to get you a report on new coins of interest. Please note I have not had time to check these out. So you will have to do your own homework on them if you want to invest in them. I do hope you find these of value, but keep in mind I’m not an investment advisor. Just a cryptocoin writer sharing my views with you. Continue reading “Report from Blockchain Expo in Silicon Valley Nov. 39 & 30 Nov.”
Bitcoin Cash has gone up as high as $2400 and is now back to about $1270. Bitcoin appears to have stabilized at about $6150. So, I’ve switched back from all Bitcoin Cash to Bitcoin again and have decided not to suggest to others what to do. Most people can’t jump in and out as I can nor spend the time watching the market as much as I.
A few days ago, Bitcoin Cash price starting skyrocketing. Then two days ago, Bitcoin’s price started on a big drop. I’ve been wondering what was causing this, but couldn’t find anything to explain it to my satisfaction. Then yesterday morning I found an open letter that explained it. It was shocking and I didn’t know if it was real or what to do if it were. After a few hours, I decided to move all my Bitcoin to Bitcoin Cash. This was a risky move and counter to anything I’d done before. I wasn’t ready to broadcast the news to others until I saw confirmation. Today’s prices are confirmation.
I’m NOT telling you to sell all your Bitcoin for Bitcoin Cash unless you are a serious risk taker. I am telling you what I found so you can decide what to do. You may want to consider moving 50% of your Bitcoin to Bitcoin Cash.