Bitcoin is Not Going Anywhere

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Yes, this is another article inspired by Bitcoin’s recent price movement and breaking the $10k mark yet again, a price point that was last reached nearly a year ago. I know, I know, just more Bitcoin hype right? Well not exactly. I’m not here to shill Bitcoin, nor am I the type of person to say “I told you so,” but I am an investor with positions in both the stock market and cryptocurrency. In the over ten years since its inception, Bitcoin has attracted a plethora of detractors, and in my opinion, without good reason. For the purposes of argument, let’s focus on some of the main reasons people dislike Bitcoin: price fluctuation, lack of growth, and the threat it poses to fiat or physical currencies.

People have been skeptical of Bitcoin’s price since the very early years, an issue that has only been exacerbated by every new market high and the articles that follow them. The issue here is that technical analysis is not all that it is cracked up to be. Follow the cryptocurrency for less than an hour and you are sure to find articles detailing how according to charts, once Bitcoin hits X price point, it will then surely hit Y. And usually, with cryptocurrency, that Y can range from plausible to meteoric. Now Bitcoin skeptics will point to this and say that the people promoting, believing, and buying into this hype are the problem; however, people write similar articles and promote stocks (the “more reliable asset”) in the same manner. Technical analysis alone cannot and should not be the end-all basis to hold an investment period. People who hate Bitcoin neglect the fact that Bitcoin is more than just a speculative investment but has actual use cases and a thriving market. Even if Bitcoin’s price drops below $10k or lower, which is an entirely real possibility, it does not somehow degrade the entirety of cryptocurrency to be worthless. And really, why is missing out on a volatile investment with price swings and a short but significant price movement a reason to call that investment a sham or a bubble? Hundreds or even thousands of stocks have seen similar parabolic movement and avoided the type of negativity that Bitcoin attracts. Take for example Novavax which within the last year has returned over 4000% and is still climbing. Is this meteoric rise enough to hate on a company? My guess is that while there are people who genuinely are remiss when it comes to cryptocurrency, a sizable portion of the hate generated by Bitcoin is by investors which have entirely missed the boat. These people talk about Bitcoin with spite and with a vengeful vigor not found in any particular belief system outside of the fact that they would like to see Bitcoin and other alternative currencies fail because if they cannot have it, no one ought to. Price fluctuation and “missing out” on an investment is not substantial enough reasons to entirely hate an investment, but a lack of usability might be.

Many investors, including myself, have written about the increasing number of use cases for Bitcoin, how easy companies such as Square have made it to invest, and the many new retailers now accepting it as a form of payment. The usability argument against Bitcoin may have worked years ago but after it has garnered some significant attention from Fintech companies and retailers, I believe we have only scratched the surface. Bitcoin is much more than a form of payment, it is tied to a blockchain, a new form of record-keeping technology that it popularized. In fact, many companies, even those not interested in accepting Bitcoin or any cryptocurrency for that matter, are investing and developing their own blockchain networks. Yes, the very Bitcoin that people either love or hate, is backed by a real, useful technology. Bitcoin’s expansion is influenced not only by the investors who have already bought in, or people who choose it as a form of payment or currency, but also those just outright interested in the technology. There is no doubt that as blockchains and other cryptocurrencies become more popular, so too will Bitcoin and vice versa.

While Bitcoin’s own market value can be called volatile, so too can fiat currencies around the world. Outside of the United States and Europe, banking is not as commonplace as either the infrastructure has not been built up to be more equitable or the governments backing them are untrustworthy or unstable. Cryptocurrency can solve this problem by removing the government factor; by being decentralized, Bitcoin’s stability does not hinge on any particular governments. This means that citizens can have a viable currency without having to trust the banks or the government to safeguard their assets. Now you may be wondering, how can such a seemingly complex technology and form of payment such as Bitcoin be more accessible to the disenfranchised? Cryptocurrency in general has come a long way, with app-style wallets making it possible for them to be held on something as commonplace as a smartphone. Yes, that still necessitates having a smartphone, but was Bitcoin ever meant to be the end all be all solution for the entire world? In my view, no, but it does present the most well-known example of cryptocurrency and provides a basis for which others can be created. Just as gold still has value but is rarely ever physically used in transactions, so too can Bitcoin be a store of value and pioneer for other cryptocurrencies that follow.

This article, those like it, and the many that detail opposing views, could not have been made possible if Bitcoin did not continue to make headlines and headway with its price action. I think what a lot of people neglect is that demand for stocks or cryptocurrency drives the price. And whether we are talking about Disney, Novavax, or Bitcoin, it is the prices that people are willing to buy or sell something that determines the market value. Keeping this in mind while looking at the 24-hour trading volume, it is apparent that regardless of any fluctuation, despite the people who do not think or ignore its use cases, Bitcoin is here to stay.

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