- Bitcoin Breakthrough 2021 Reviews: Scam or Legit Strategies?
- What Does the Bitcoin Breakthrough 2021 Program Consist Of?
- Section 1 – Bitcoin Investing
- Section 2 – Blockchain Technology
- Section 3 – Selling Products For Bitcoin
- Bitcoin Breakthrough 2021 Features
- How to Join Bitcoin Breakthrough 2021?
- Should You Invest In Bitcoin? – Times Money Mentor
- What is bitcoin and how does it work?
- Which are the three biggest cryptocurrencies?
- How has the bitcoin price performed?
- What are the new cryptocurrencies to watch?
- How risky is investing in cryptocurrencies?
- Is bitcoin a good investment?
- Is there a less risky way of investing in crypto?
- How to buy bitcoin
- Is Bitcoin a Good Investment? • Pros & Cons in 2021 • Benzinga
- Simply Put: Is Investing in Bitcoin Risky?
- Where to Invest in Bitcoin
- 1. eToro
- 2. Coinbase
- 3. BitcoinIRA
- Advantages of Bitcoin Investments
- Disadvantages of Bitcoin Investments
- Can Bitcoin be Exchanged for Real Money?
- Is Bitcoin the Future, Really?
- More on Cryptocurrency
- Take the Cryptocurrency Explained Beginner Course
- Bitcoin Rises Above ,000. Where Does It Go From Here?
- Big Companies Are Buying Bitcoin
- Institutional Investors See Bitcoin as an Inflation Hedge
- PayPal Makes Bitcoin Easier to Own and Spend
- Could Bitcoin Become the New Gold?
- The Final Word on Bitcoin: Buyer Beware
Bitcoin Breakthrough 2021 Reviews: Scam or Legit Strategies?
Bitcoin Breakthrough 2021 is a Bitcoin investment strategies program developed by 7 Figure Mentor. Investing in Bitcoin now is a very good idea seeing how much the price of a Bitcoin has risen, and it will continue to do the same.
But in order to understand how the greatest returns from Bitcoin investments can be made, one has to know more about Bitcoin and Bitcoin investment strategies, which is exactly what the Bitcoin Breakthrough 2021 program is teaching.
Bitcoin is virtual money, more exactly a cryptocurrency that makes it easier for people who hold it to buy products, services, and other things through vendors accepting Bitcoin as a payment method. Therefore, investing in Bitcoin guarantees financial security for the world of tomorrow.
And it’s much more than that, seeing that Bitcoin has become one of the strongest assets to hold on the financial market nowadays.
What Does the Bitcoin Breakthrough 2021 Program Consist Of?
The Bitcoin Breakthrough 2021 program by 7 Figure Mentor consists of 3 separate video series sections, as follows:
Section 1 – Bitcoin Investing
- What Is Bitcoin?
- The Lowdown On Bitcoin Investing
- How Bitcoin Really Works
- How You Can Acquire Bitcoins
- Choosing the right Bitcoin Wallet
- Getting Ready For Bitcoin Trading
- Real Life Bitcoin Investment Strategies
- Avoid Bitcoin And Cryptocurrency Scams
- Bitcoin Investing Best Practices
Section 2 – Blockchain Technology
- 3 Important Things You Should Know About Cryptocurrency
- 4 Key Areas for Developing Blockchain Platforms
- 4 Things You Should Know Before Investing in Cryptocurrency
- 5 Cryptocurrency Investment Tips That You Should Know
- Easy Tips for Getting Started in Cryptocurrency Trading
- How to Use Blockchain Technology
- The Top Things to Avoid with Cryptocurrency Investing
- Top 4 Tips to Start Trading Cryptocurrencies
- Top Investment Tips for Trading in Cryptocurrency
- Understanding 3 Different Types of Blockchain Technology
Section 3 – Selling Products For Bitcoin
- How to set up a Rocketr
- How to set up a Bitcoin in Rocketr
- Adding a product
- Adding a pay button
- Affiliate marketing
- Email marketing
- Blacklisting buyers
Bitcoin Breakthrough 2021 Features
Here are the best features of the Bitcoin Breakthrough 2021, as the program’s official website mentions them:
- It’s absolutely FREE to start.
- Taught by professionals with years of experience
- Personalized chapters to make any individual approach to learning possible
- 24/7 online access that allows people to learn at any time, from anywhere, and at their own pace
- Why Bitcoin Breakthrough 2021?
The digital currency boom is today more real than ever, seeing the financial system is starting more and more to rely on what happens with digital money. While the future is indeed uncertain, as it is with anything else for that matter, Bitcoin’s total value is over $1 trillion.
And people seem to want Bitcoin more and more, this leading to an increase in its price with every day that passes and the Bitcoin movement becoming more mainstream. There are many reasons why Bitcoin has been so widely embraced as of late. For example, it has started to be adopted by retail and institutional investors.
Another reason is that low-interest rates are persistently increasing as the value of everything does, and investors have turned to cryptocurrency to get more what they are holding in cash. Besides, the COVID-19 pandemic has led to a rise in the online commerce sector as well, and this nudged much more consumers to lay off physical money.
Bitcoin, together with some of the other digital assets, is causing traditional currencies to depreciate and a hedge against potential bursts of inflation. Looking at all this and at how Bitcoin’s price is rising every day, it becomes very clear that holding Bitcoin leads to certain profits.
And Bitcoin Breakthrough 2021 aims to teach any person who is looking to invest in this cryptocurrency how things are done. There’s no reason not to give it a try, especially since it comes with a money-back guarantee and can be joined for absolutely FREE at the moment. It’s not enough to just buy and own Bitcoin in order to make serious profits from cryptocurrency.
The best Bitcoin investment strategies have to be implemented too. Bitcoin Breakthrough 2021 promises to make things easier not only for those who know a thing or two about Bitcoin already but also for those who are just finding out what this cryptocurrency is all about.
How to Join Bitcoin Breakthrough 2021?
As mentioned above, Bitcoin Breakthrough 2021 can be currently joined for absolutely FREE. One needs to visit the Digistore24 page, where the program is being advertised and offered.
After clicking the Buy Now button, all that has to be done is to fill out the contact and information details in the form that’s provided. While joining Bitcoin Breakthrough 2021 by 7 Figure Mentor is absolutely FREE.
To begin with, there will be a monthly fee charged from the customer’s PayPal or credit card accounts for the subscription, as it follows:
23-installment payment plan, FREE to access, and 23 installments of $10 to be billed every month starting 30 days after joining
12-installment payment plan, which is also FREE to access and charges $20.99 every month, money that will be billed starting with the second month of subscription
The FREE joining offer is for a limited time only, so those who are interested in becoming part of this program without getting charged a dime, in the beginning should hurry to subscribe to it NOW. Regardless of the payment plan chosen, all purchases are covered by a 60-day money-back guarantee.
This means unsatisfied customers who decide the program doesn’t work for them during the first 2 months of use can opt to no longer be members of the Bitcoin Breakthrough 2021 and be paid back the money they have been charged until then.
Requests for refunds together with any other question or inquiry about the product can be addressed to Digistore24 through the following means of communication:
+49 (5121) 9289223
Should You Invest In Bitcoin? – Times Money Mentor
If you are wondering whether digital currencies bitcoin and ethereum are a wise asset group to invest your money in, this article will come in handy.
Hailed by fans as a market-disrupting liberation, and demonised by critics as a dangerous, volatile creation, bitcoin and other cryptocurrencies are never the headlines for long.
Since December 2020, bitcoin has enjoyed a theatre of dramatic ups and downs. On December 16 the price of bitcoin hit $20,000 for the first time.
On January 3, 2021, its value soared above $34,000, meaning the cryptocurrency had gained almost $5,000 in the first few days of 2021.
Then on February 9, 2021, its value briefly hit a new record high of $48,000 after electric-car maker Tesla revealed that it had bought $1.5bn of the cryptocurrency.
On February 21, the coin rallied to a new record high, peaking at $58,354 before falling dramatically two days later as low as $44,845.72, a loss of 18.4% for the day and a decline of almost a quarter from Sunday. On March 13 the flagship crypto then hit a new record of $61,701.
A significant headline came on March 17 when Morgan Stanley became the first big US bank to offer its wealthier clients access to bitcoin funds – albeit restricted to no more than 2.5% of an investor’s total net worth.
A few days later Tesla boss Elon Musk announced that customers could now buy their Tesla car with Bitcoin.
These are significant steps towards the acceptance of bitcoin as an asset class and even more institutional money being pumped into digital currency.
There’s a certain amount of mystery around bitcoin and other cryptocurrencies. Satoshi Nakamoto is the pseudonym used by the presumed person or people who developed bitcoin, created and deployed bitcoin’s original implementation software and conceived the first blockchain database.
What is bitcoin and how does it work?
The concept of digital monies such as bitcoin that people send online is not that complicated in itself — after all, transferring money from one online bank account to another is doing exactly that.
Cryptocurrencies use blockchain technology — a way of sending data in cyberspace — to do this.
But, different from normal currencies dollars and pounds, cryptocurrencies are “decentralised”, which means they are not regulated by a financial authority, a government or central banks.
This brings some advantages: cryptocurrencies are global, meaning they have the same value in every country. This feature makes them much easier to transfer from person to person across the globe, without the headache of exchange rates.
Investing in anything always comes with risk meaning you can always lose money but the big disadvantage of cryptocurrencies is its extreme volatility. There have also been reports that people have had to wait to get their cash out because of technical snarl-ups.
Which are the three biggest cryptocurrencies?
Bitcoin, the best-known and first major cryptocurrency, launched in 2009 and remains the market leader. Its market capitalisation — effectively its total worth — is $1.075bn, as at March 2. Ethereum and Binance come in second and third, with respective market caps of $206bn and $41bn, as at March 22.
Since 2009, a wide range of challenger cryptocurrencies, dubbed altcoins, have arrived on the scene.
How has the bitcoin price performed?
The bitcoin price has climbed steadily since September 2020, fuelled by demand from investors and also news that PayPal will allow US customers to buy and sell the cryptocurrency within its app next year and Tesla pledging to start accepting it as payment for its vehicles. One bitcoin currently costs $57,217, as at March 22.
However, the cryptocurrency has made steady gains before, such as at the end of 2017 – before collapsing in 2018 (see graph below, which was produced in January 2020).
In 2018, MPs called cryptocurrencies a “Wild West industry”
Extreme volatility is perhaps the most defining factor of the cryptocurrency market.
To put bitcoin prices into investment profit and loss terminology, if you had invested at the start of 2020, you would be sitting on a 300% profit by the end of the year.
However, if you’d invested at the start of 2018 and sold at the end of the year on New Year’s Eve, you would have lost 73% of your money as the bitcoin price collapsed.
If you wonder what market forces drive these prices up and down so wildly, you are not alone. While generally speaking the value of these currencies is, anything else, linked to supply and demand plus the number of competitors, it is often difficult to determine what exact factors influence this erratic performance. This makes digital currency all the more high risk an asset to invest in!
What are the new cryptocurrencies to watch?
New, smaller cryptocurrencies include litecoin, bitcoin cash and EOS. It might be tempting to invest in crypto newcomers, but you should exercise caution. Smaller altcoins are even more volatile than bitcoin. If anything, they are really just speculative investments. If you are tempted, experts say you should only invest a small amount of your money: 5% or less.
How risky is investing in cryptocurrencies?
If you want to invest in crypto, ponder first whether you would buy a house in Rapid City, South Dakota.
This city in the United States has just over 75,000 inhabitants and is reportedly one of the places with the most unpredictable weather on earth, where snow blizzards and summery thunderstorms occur without warning, before everything calms down again and temperatures rise dramatically the very next day. The weather of Rapid City is an apt metaphor to describe the behaviour of bitcoin & co: it can be totally bonkers.
Rapid City in America has some of the craziest weather in the world – a bit how volatile crypto prices can be
If you do invest, be prepared to lose some or all of your money. Crypto is not conventional investing.
In 2018, MPs called cryptocurrencies a “Wild West industry”. They are also not regulated by the UK watchdog, adding another layer of risk.
From January 6, 2021, the Financial Conduct Authority will ban the sale of complex derivatives that speculate on cryptocurrency movements: financial services will be prohibited from offering retail customers contracts for difference, spreadbet options, futures and exchange traded notes that focus on digital currencies.
Bank of England governor Andrew Bailey recently said he was “very nervous” about people using bitcoin for payments. He has previously warned that cryptocurrency investors should be prepared to “lose all their money”.
Is bitcoin a good investment?
Bitcoin is at the (very) “high-risk” end of the investment spectrum. The price of cryptocurrencies is volatile; some can go bust, others could be scams, and occasionally one may increase in value and produce a return for investors.
As Danny Cox, from the financial services company Hargreaves Lansdown, puts it: “Cryptocurrencies could remain niche, become mainstream, vanish without trace or anything in between, and any investment should be considered as very high risk.”
Mark Hipperson, chief executive of Crypto platform Ziglu, argues the case for digital coins going mainstream.
“With more and more big brands such as Tesla and Starbucks accepting crypto, [Starbucks is testing a way to let users of its mobile app pay for coffee and food with the cryptocurrency Bakkt Cash, for example] there now seems to be little doubt that one day soon crypto will be accepted at as many places as traditional currencies.”
As with any investment, do your due diligence and don’t pin all your hopes on one company or one cryptocurrency: spread your money around so you spread the risk and only invest what you can afford to lose.
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Is there a less risky way of investing in crypto?
“Stablecoins” could be a less risky way of investing in cryptocurrency, according to Gavin Brown, associate professor in financial technology at the University of Liverpool.
“Stablecoins continue to develop and be the potential solution to the problems of volatility and credibility for cryptoassets. In contrast to cryptos, stablecoins have actual assets behind them, regular currencies,” he says.
DAI and TUSD are two of them, which are both backed with the US dollar (one coin is worth $1). DAI is hosted on the Maker (MKR) platform, and crypto platforms can also be safer to invest in than the actual currency, he says. “Risk is therefore low but gains are very low or nil too.”
Brown points to tether, the largest stablecoin, backed by one dollar per coin. “Tether bounced back during the pandemic’s [first] lockdown, not only maintained its position as the largest stablecoin but more than doubled its market value – from $4.6bn to $9.2bn [it is now worth $22bn, as at January 4].
It shows volatility has gone down.” He adds that potential investors shouldn’t necessarily see tether as the next big thing. “In theory it won’t ever be worth more than a dollar.
But it’s potentially an interesting option for any varied portfolio to include tether – it could be a slice of stability if [other] things start to suffer.”
According to Brown, it could also be less risky to make long-term investments in the companies associated with cryptocurrencies. For example, shares in , which is planning to launch a currency called Diem (formerly Libra), JPMorgan, which has the digital JPM coin that is equal in value to the US dollar, and the bank Wells Fargo, which is developing a US dollar-linked stablecoin.
There are also some funds and investment trusts that have exposure to cryptocurrencies, which is a less risky way of investing than buying the currencies themselves.
How to buy bitcoin
- Where can I buy cryptocurrencies?
Coinbase and Binance are two of the world’s largest bitcoin trading platforms. They are touted as the easy and fast way for new users to purchase various cryptocurrencies such as bitcoin. Other ways to buy include the digital currency app Ziglu and on the investment platform eToro.
Gemini, founded by the Winklevoss brothers (of fame), is a digital exchange that allows customers to buy, sell and store cryptocurrencies. It was recently awarded an operational licence by the Financial Conduct Authority, and is regulated by the New York State Department of Financial Services.
If you want to buy bitcoin and other cryptos – and sell them again – there’ll be several fees, such as transaction fees, deposit fees, withdrawal fees, trading fees and escrow fees of usually a few percent of the total transaction value.
- What about a bitcoin fund?
Several companies are planning to launch bitcoin funds, though have run into difficulties with regulatory agencies so far. The main purpose of it would be to facilitate the investing process into cryptocurrency and make the asset class more attractive. It will still be volatile, but it could be easier to sell your investment and get your money back than investing directly.
There are a few ways to get exposure to cryptocurrency with existing investment funds. For example, Ruffer Investment Company, an investment trust, announced in December 2020 that it had allocated 2.5% of its portfolio to bitcoin.
If you’re more interested in the blockchain technology, the Invesco Elwood Global Blockchain exchange traded fund uses the Elwood Blockchain Global Equity index to track a basket of companies deemed to have the “potential to participate in the blockchain ecosystem”.
Its top 10 holdings include Taiwan Semiconductor Manufacturing and Samsung.
To find out more about investing in bitcoin, read about Lewis, who taught himself about cryptocurrency and made £8,500 in less than a year, and Anna, who made $16,600 in 2020
Is Bitcoin a Good Investment? • Pros & Cons in 2021 • Benzinga
A collective insanity has sprouted around bitcoin over the last decade. It’s hard to predict whether this cryptocurrency will eventually prove to be a great investment or just a passing storm. That thrill of riches or ruin leaves some investors wary, but others want to chase the chance for profits from a bitcoin investment.
Is bitcoin a good investment? Start with our guide to learn more and make your own judgment.
Simply Put: Is Investing in Bitcoin Risky?
Similar to any speculative investment, buying bitcoin carries some well-known risks: The price could drop precipitously and a single online hacking or crashed hard drive incident can wipe out your stash of bitcoin with no recourse.
Bitcoin has seen dramatic run-ups in price followed by some painful crashes but has consistently retained a significant portion of its previous gains every time it plummets.
Since its inception, Bitcoin was the 1st digital asset to beget the current ecosystem of cryptos.
For quite a while, it grew an underground following of investors who saw its future as a possible replacement to the physical monetary system.
The decision to invest in bitcoin comes down to your appetite for risk.
Where to Invest in Bitcoin
You can use an online broker to invest in bitcoin. Investing in bitcoin is similar to investing in stocks, but it is far more volatile due to the daily swings in bitcoin. Here are the steps to invest in bitcoin:
- Open a brokerage account with a company that allows crypto investments.
- Deposit funds into your brokerage account.
- Buy BTC.
- Later sell the crypto for a gain or loss.
These steps, however, depend on the exchange or trading platform you’re using.
Here are some top brokerages to invest in bitcoin.
Trade popular cryptocurrencies, explore professionally managed portfolios and connect with traders. eToro currently supports the purchase and sale of 15 unique coins, including:
- Bitcoin (BTC)
- Ethereum (ETH)
- Bitcoin Cash (BCH)
- Ripple (XRP)
- Dash (DASH)
- Litecoin (LTC)
- Ethereum Classic (ETC)
- Cardano (ADA)
- MIOTA (IOTA)
- Stellar Lumens (XLM)
- EOS (EOS)
- NEO (NEO)
- TRON coin (TRX)
- Zcash (ZEC)
- Tezos (XTZ)
Coinbase makes it safe and simple for you to buy, sell and hold bitcoin. You can buy a portion of bitcoin with a $0 account minimum.
Pay for purchases conveniently using your debit card or by connecting your bank account. Owning bitcoin on this brokerage is as simple as creating an account, verifying your identity and buying your cryptos.
Take control of your bitcoin investment everywhere you go through the Coinbase mobile app. The brokerage allows you to hold onto your bitcoin, convert it into another crypto, spend it on expenses and transfer it to anyone, anywhere in the world.
BitcoinIRA’s proprietary platform enables you to self-trade crypto anytime so you can take action right when the market moves.
Here’s how it works:
- Create an account. Get your customized dashboard and digital wallet after you create an account. Fund your account, access live pricing and learn more with a knowledge base.
- Transfer funds. Transfer your IRA in 3 easy steps. Simply tell us how much you want to invest, how you want to fund your account and your profile information. Most accounts will be ready to trade in just 3 to 5 days.
- Start trading. Trade digital assets inside your self-directed retirement account using our proprietary platform. Buy, sell or swap anytime, anywhere by visiting the self-trading area within your dashboard.
Get started with BitcoinIRA.
Advantages of Bitcoin Investments
The overwhelming performance of bitcoin — as a currency and investment — has attracted traditional and institutional investors a. Bitcoin as an investment tool provides you with the following advantages over traditional investments.
- Liquidity. Bitcoin is arguably 1 of the most liquid investment assets due to the worldwide establishment of trading platforms, exchanges and online brokerages. You can easily trade bitcoin for cash or assets gold instantly with incredibly low fees. The high liquidity associated with bitcoin makes it a great investment vessel if you’re looking for short-term profit. Digital currencies may also be a long-term investment due to their high market demand.
- Lower inflation risk. Un world currencies — which are regulated by their governments — bitcoin is immune to inflation. The blockchain system is infinite and there’s no need to worry about your cryptos losing their value.
- New opportunities. Bitcoin and cryptocurrency trading is relatively young — new coins are becoming mainstream on a daily basis. This newness brings unpredictable swings in price and volatility, which may create opportunities for massive gains.
- Minimalistic trading. Stock trading requires you to hold a certificate or license. You must also go through a broker to trade a company’s shares. But bitcoin trading is minimalistic: simply buy or sell bitcoin from exchanges and place them in your wallet. Bitcoin transactions are also instant — un the settlement of stock trading orders, which could take days or weeks.
Disadvantages of Bitcoin Investments
Bitcoin may be the future of monetary exchange, but it is equally important that you are aware of the concerns surrounding cryptocurrency investing. Here are some serious risks associated with bitcoin investments.
- Volatility. The price of bitcoin is always rippling back and forth. If you happened to buy bitcoin on December 17, 2017, the price was $20,000. Weeks later, you couldn’t sell your investment for more than $7,051. The bitcoin market is constantly changing. With such an unpredictable market, you can hardly get a good return on your investment. To avoid huge loss, keep a close eye on the market.
- Threat of online hacking. Hacking is a big threat facing a bitcoin investor. Bitcoin exchanges let you buy and sell your cryptos using a mobile app or website. This leaves them susceptible to hacking and theft of all your investment. And bitcoin held on exchanges isn’t insured by the FDIC.
- Little or no regulation. The bitcoin market currently operates with no major regulations. It isn’t taxed and governments have no clear stance on it. As a result, you could stand exposed to fraud and malpractice.
- Limited use. Bitcoin is currently only accepted by few online merchants. Many companies don’t also recognize bitcoin as a legitimate exchange, making it an unfeasible investment vessel. Besides, there’s only a fixed supply of bitcoin — 21 million.
- Wallets can be lost. If your hard drive crashes or virus corrupts your wallet file, you lose your bitcoins. You can go from a wealthy to bankrupt investor within seconds with no way to recover.
Can Bitcoin be Exchanged for Real Money?
Bitcoin can be converted to cash in a couple of different ways. You can sell bitcoin on a cryptocurrency exchange Coinbase or Kraken. The cash will be deposited directly into your bank account.
Bitcoin ATMs are rare, but if there is 1 near you, you can exchange your bitcoin for cash. And some websites allow you to sell bitcoin for a prepaid debit card.
Is Bitcoin the Future, Really?
Price volatility isn’t all you need to worry about in this hyped-up market. Since bitcoin largely exists outside government regulation, it poses more risk than dealing with government currency and other asset classes. However, it isn’t hard to sell or buy and you can make a limited amount of purchases.
If you decide to dabble in bitcoin, classify it under your high-risk, high-reward portfolio. You can reap huge profits in the short-term and lose heavily if the value drops. Understand that bitcoin is a relatively new technology, and even futurists aren’t sure about its fate. Use the philosophy “buyer beware” when investing in bitcoin.
More on Cryptocurrency
Take a look at more cryptocurrency content and learn about the space or start investing!
Take the Cryptocurrency Explained Beginner Course
Take a look at the Cryptocurrency Explained Beginner Beginners Course for a solid start in bitcoin. The course is designed for beginners with little or no knowledge of bitcoin.
It includes 19 video with practical tutorials and tips that total nearly 3 hours. You’ll learn how to buy bitcoin anywhere in the world and how to set up a crypto wallet, as well as how to avoid common mistakes.
The course is offered by Lark Davis, cryptocurrency expert and host of New Zealand’s No. 1 bitcoin channel, “The CryptoLark.”
Gemini builds crypto products to help you buy, sell, and store your bitcoin and cryptocurrency.
You can buy bitcoin and crypto instantly and access all the tools you need to understand the crypto market and start investing, all through one clear, attractive interface.
Gemini Crypto Platform offers excellent account management options. You can manage your account at a glance, view your account balance 24-hour changes and percent changes. Get started with Gemini now.
Bitcoin Rises Above $50,000. Where Does It Go From Here?
Editorial Note: Forbes may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations.
Despite their heavy reliance on data, investors can be an emotional lot—they are susceptible to the same biases as everyone else, after all. Here’s the latest evidence for that proposition: Bitcoin has traded above $50,000.
The popular cryptocurrency recently passed this key psychological marker, hitting $51,202 as of writing.
Financial services companies Mastercard and BNY Mellon have announced new Bitcoin initiatives, helping it top this notable threshold.
Their moves follow an announcement by Tesla’s iconoclastic chief executive Elon Musk that his company had purchased $1.5 billion worth of Bitcoin and would begin accepting payments in the cryptocurrency.
At this time last year, one Bitcoin was worth slightly less than $10,000.
“The story right now is institutional adoption,” said Stephen McKeon, associate professor of finance at the University of Oregon. “The arrival of qualified custodians and other key infrastructure has facilitated the onboarding of significant institutional capital in a way that was unfeasible just a few years ago.”
Despite Bitcoin’s recent rise, you still need to be careful. While the flagship cryptocurrency appears to be maturing, it’s still extremely volatile in both directions. For regular investors, that means you should tread lightly with this speculative asset class unless you have your fundamentals, an emergency fund and basic retirement portfolio, covered.
Big Companies Are Buying Bitcoin
BNY Mellon, which can trace its roots back to the 18th century, is the latest big name to adapt to the world of Bitcoin.
The financial services giant plans to help its asset-management customers utilize Bitcoin, essentially treating it any other security.
Meanwhile, Mastercard said it would process Bitcoin payments on its network in an effort to give businesses and customers “more choice” in how they buy things.
Note that Elon Musk’s infatuation with the digital currency is nothing new, and it jibes with his affinity for unconventional investments and ideas.
Bitcoin is my safe word
— Elon Musk (@elonmusk) December 20, 2020
In its annual report, Tesla said it added $1.5 billion in Bitcoin as part of a larger policy to earn more on its cash that it doesn’t need to keep the company going.
This alternative reserve will also look into gold bullion, gold exchange traded funds (ETFs), and potentially other assets in the future.
The company, which is valued at slightly less than $900 billion, also said that it plans to begin taking Bitcoin as payment “in the near future.”
Today’s move higher appears to be driven in large part by speculative buying. The irony is that speculation could undermine the interests of Tesla and Mastercard in using Bitcoin as a medium of exchange.
One reason we use dollars is that we don’t expect the value of one dollar to rise or fall 14% on any given day.
Why use Bitcoin to buy goods and services when its value fluctuates double-digits on a regular basis?
Institutional Investors See Bitcoin as an Inflation Hedge
BNY Mellon, Mastercard and Tesla are only the latest boldface names backing Bitcoin.
Paul Tudor Jones, one of the nation’s richest hedge fund investors, appeared on CNBC in late 2020 to make his case for the cryptocurrency, citing concerns about inflation and the Federal Reserve.
While inflation remains subdued now, Tudor Jones’s Bitcoin thesis appears to rest on the development of the coronavirus crisis since early 2020.
As Covid-19 spread to Europe and then the United States, starting in late February, governments began imposing lockdowns to limit the spread of the virus. Lockdowns suppressed economic growth, sparking a global recession, and central banks stepped in to support national economies.
In the U.S., the Federal Reserve immediately cut short-term interest rates to near zero and began printing trillions of dollars to buttress the economy.
As the economy began to heal, Fed Chair Jerome Powell announced that the Fed would allow inflation to run a bit higher before the FOMC would contemplate raising interest rates again.
The new strategy crystallized new thinking and new research at the Fed concerning weak inflation.
Enter Paul Tudor Jones and other hedge fund heavies, who began buying up Bitcoin in May in anticipation of rising inflation.
“The reason I recommended Bitcoin is because it was one of the menu of inflation trades, gold, TIPS breakevens, copper, being long yield curve, and I came to the conclusion that Bitcoin was going to be the best inflation trade,” Jones told CNBC last month.
PayPal Makes Bitcoin Easier to Own and Spend
In October 2020, online payments giant PayPal announced it would let customers buy, hold and sell a range of cryptocurrencies, including Bitcoin, as well as allow them to actually make purchases with Bitcoin at more than 26 million businesses.
In August 2020, Fidelity launched a passively managed Bitcoin fund for accredited investors, the Wise Origin Bitcoin Index Fund I. Fidelity, one of the few mainline Wall Street firms to fully embrace Bitcoin, has created a separate unit—Fidelity Digital Assets—to manage this fund and similar vehicles.
These developments confirm a growing trend of regulatory and institutional acceptance of cryptocurrencies. When Fidelity announced its Bitcoin fund, for instance, it also released survey data showing that 36% of institutional investors in the U.S. and Europe already owned digital currencies, and 60% believed digital assets belonged in their portfolios.
Could Bitcoin Become the New Gold?
So where do we go from here? One Citibank analyst says Bitcoin could hit $318,000 by the end of next year, ning its meteoric rise to the 1970s gold market. An ounce of gold was worth about $35 in the beginning of 1970, compared to a little more than $1,900 now. Part of gold’s appeal, as Paul Tudor Jones noted, is its value as an inflation hedge.
But does gold actually behave that way?
The real story is more complicated, according to Campbell Harvey, Duke professor and senior advisor to Research Affiliates. Over a time frame of hundreds of years, gold may retain its value. But over shorter periods of time, it’s highly volatile and very unpredictable.
Despite this, gold certainly fills a role as a security blanket for investors who are anxious about the state of the world. Gold’s most recent hayday, for instance, was between 2011 and 2012 when the U.S.
was stumbling through its post-Great Recession recovery and the Euro Zone was teetering on the brink of currency disaster.
For much of the past eight years, as stocks have zoomed, gold has been a dead weight, though.
It appears, then, that institutional investors are hoping to get on the ground floor of the new gold. Bitcoin’s current rollercoaster ride may track the bullish, risk-on appetites of stock traders, but eventually it might replace gold as a safe haven.
“The Bitcoin network currently stores $350 billion,” McKeon said. “In contrast, several trillion dollars are stored in the form of gold. So, Bitcoin is still comparatively small.
As the narrative around, and acceptance of, Bitcoin as digital gold grows, the network will store substantially more value.
This translates to a higher price for Bitcoin since supply growth is capped at about 2% annually, and supply increases will further decline over time.”
The case, then, is that Bitcoin has much more room to grow than gold and will continue to attract big money in search of high returns in an era of low yields.
The Final Word on Bitcoin: Buyer Beware
Regular investors don’t really have the luxury to stomach wild price volatility and wait out years and years of negative returns on the hope that an esoteric decentralized financial product will conquer the commanding heights of finance and upend gold as the ultimate safe-haven asset. You need a steadier financial plan, a well-diversified portfolio of low-cost index funds that has proven to make retirement possible.
If you want to scratch your Bitcoin itch, make sure you do so with a fraction of your taxable investments, in your brokerage account. The standard allocation recommended for gold has been a maximum of 10% of your total portfolio. If Bitcoin ends up as the new gold, that upper limit would still make a ton of sense.