BITCOIN (BTC) On FYRE

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Hey! Clear the way in the old bazaar

Hey you! Let us through! It’s a brand new star!

Oh come, be the first on your block to meet his eye!

Make way! Here he comes!

Ring bells! Bang the drums!

You’re gonna love this guy!

Which guy?

Well… Mr Bitcoin of course!

I know, I know. I’ve posted about Bitcoin and Cryptocurrencies before (read here, here, here and so much more).

BUT.

There’s been some huge albeit largely undetected news going on in the Crypto world.

Bitcoin is back Baby!

Whoa! Just look at that price chart.

From a low of just over US$4800 in March, to just over US$19,000 or a cool $26k AUD.

First, What Is Bitcoin?

Well, for those uninitiated…

Bitcoin in short, is a digital currency which forms part of the “Blockchain” revolution. The Blockchain is a decentralized platform where no governing body (e.g. a central government) regulates or controls transactions on its platform.

What does happen, is that everyone regulates everyone else using peer-to-peer technology – a utopian digital currency of sorts.

It was created by a person (or persons) under the pseudonym “Satoshi Nakamoto” in 2009.

The premise of Bitcoins, is that they are “mined” by supercomputers which solve an ever-complex mathematical code, with a finite number of bitcoins available – around 21 million.

As you can see in the price chart above, Bitcoin and other Cryptocurrencies – went through the mother of all booms in late 2017, early 2018.

Yours truly was swept up in the wave as well – dropping $3k into “Altcoins” (read, “extremely speculative shitcoins”). If you find out how I did, read here.

What’s Going On Now?

As you can see, the price for Bitcoin and other Cryptocurrencies in general – have been surging for the last few months.

But why?

Could it because Bitcoin is gaining more mainstream attention?

Could it because it is a genuine alternative asset class to say, the likes of Gold?

Could it because of more and more institutional investors jumping in?

Yes, yes and yes.

How-EVER.

Here at The Frugal Samurai dot com, we don’t deal with speculation or fantasia.

We deal in facts people!

And the fact is, I honestly have no fooking idea why Bitcoin is going up.

What?

Like you, I can only do so much research.

Stories like how Fund Managers such as Pendal Group has bought in recently.

Or how US hedge fund titans Stan Druckenmiller and Paul Tudor Jones hold some.

Or maybe it’s because this is the beginning of the end for fiat currency due to so much printing of cash.

Who honestly knows!

But…

If I had to pin it on something, anything…

I would say it is because there is a lack of risk-adjusted return from any asset class in the world right now.

By this I mean, equities are over-valued, real estate is over-valued, there’s no point holding bonds and you can forget about sitting in cash.

Therefore, any asset class which has a low entry price, has a sliver of credibility, and is relatively accessible… is bound to look attractive right now.

But…

We are a looong way before Bitcoin and Cryptocurrencies in general become more than just a speculative punt.

I strongly believe for something to hold true value, it must hold value to the lowest common denominator.

Not just a store of wealth, inflation hedge and plan B for Ultra-High-Net-Worth Individuals and Institutions.

Currently the price of 1 bitcoin is prohibitive for the average investor, but which other cryptocurrency would you “invest” in for its prospects?

It’s because there are so few other Cryptocurrencies worth “investing” in, that the whole crypto-market turns into a rampant speculation pool.

The Blockchain

The value as I’ve always maintained, is in the Blockchain itself.

More and more uses of the Blockchain are coming to prominence, because it offers transparency and hence credibility for transactions to occur.

If, and this is a massive if, I was to consider investing in this area – I would look at those companies involved with the Blockchain Technology and go from there.

As for Bitcoin and Cryptos?

Feels a bit like Prince Abooboo to be honest.

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