Investing in Bitcoin?
What I suggest does not function as financial advice.
This being said, Bitcoin definitely merits consideration.
So with Bitcoin earlier this week hitting the $10k threshold, it’s no wonder people believe it’s a bubble. In June of this year it plunged below $1,000, and has since completely skyrocketed.Current news available here.
Investors for its incredibly volatile markets tend to poopoo cryptocurrencies. Yet with uncertainty, the profit margins are drastically increased. Bitcoin has increased its value by more than 1,000 per cent in less than 6 months.
It is a sure sign of bubble to many. It’s a unique opportunity for others to make wealth in a short period of time.But let’s just walk for a second. Speak of it in economic terms. Looking at a graph of supply and demand, you see that as supply increases, demand shrinks. And as production shrinks, competition is increasing.
This is also the inverse relation.
Anything named “scarcity” creates demand. Scarcity implies living in shortages. Think of it in a draught, like snow. There is little water available, and so demand increases significantly.On the flip side moisture is in extreme excess during a monsoon. And people really don’t want any water to do anything.
These are instances you see in real life but, in terms of crypto, let’s look at scarcity.
Just 21 million bitcoins will ever be produced there. There are about 33 millionaires worldwide.
Even if all those millionaires want a whole blockchain, that’s impractical. Bitcoins just aren’t enough to go around.
Scarcity creates demand.
Today citizens in the United States (and other well-off countries) do not really consider bitcoin as anything but an investment. But that mentality fails to take those hit by economic crises into consideration.Consider Venezuela. More than 4,000 per cent of inflation is awaiting them. Their fiat currency is practically in vain. As of August 2015, Bitcoin had been adopted by around 450 firms. There were more than 85,000 adopting the crypto-currency in November 2016.
The status is a year old, and a wave of economic destruction continues to torment Venezuela. So, the amount is certainly higher.More than 100,000 miners have already entered the country into the campaign. Bitcoin is the fiat of Venezuela more robust, and is thus regarded as a viable form of currency.Today, in the minds of the rich, we have seen the value of bitcoin and in the case of those in economic crises we have seen its worth.