Anything I say is not to be used as financial advice.
That being said, bitcoin is definitely worth considering.
And with bitcoin crossing the $10k threshold earlier this
week, it’s no wonder people think it’s a bubble. It dropped below $1,000 in
June of this year, and has absolutely skyrocketed ever since.
Investors tend to poopoo cryptocurrency for its incredibly
volatile markets. With volatility, though, comes drastically increased profit
margins. In less-than-6-months, bitcoin has increase in value by more than
To many it’s a sure sign of a bubble. To others, it’s a
unique chance to make a fortune in a short period of times.
But let’s step back for a second. Business Think about it in terms
of economics. When you look at a supply and demand graph, you see that as
supply increases, demand decreases. And as supply decreases, demand increases.
This is known as an inverse
Demand is created through something called
“scarcity”. Scarcity means to be in short supply. Think about it like
water in a draught. There’s little water available, and thus demand drastically
On the flip side, rain during a monsoon is in extreme
excess. And people want nothing to do with more water.
These are examples you see in real life, but let’s look at
scarcity, in terms of crypto.
There will only ever be 21 million bitcoins mined. In the
world, there are roughly 33 million millionaires.
Even if every one of those millionaires wants a whole
bitcoin, it’s impossible. There are simply not enough bitcoins to go around.
Now, in the United States (and other well-off countries),
people don’t necessarily see bitcoin as anything other than an investment. But
that mindset fails to take into account those who are affected by economic
Consider Venezuela. They’re facing more than 4,000% of
inflation. Their fiat currency is essentially useless. As of August 2015, there
were about 450 companies that accepted bitcoin. In November 2016, there were
more than 85,000 accepting the cryptocurrency.
That stat is a year old, and Venezuela continues to be
plagued with an economic death spiral. So, the number is surely higher.
In fact, more than 100,000 miners have entered the game in
the country. Bitcoin is more stable the Venezuela’s fiat, and thus is seen as a
viable form of currency.
Now, we’ve seen bitcoin’s value in the eyes of the wealthy,
and we’ve seen its value in the eyes of those in economic crises.
So to answer your question, yes. Bitcoin is worth
considering as an investment.