The Bitcoin Boom: Stop Doubting, Start Profiting
Like many others, I was skeptical of Bitcoin when it first launched.
Of course, I’m skeptical of just about everything, including the U.S. dollar.
And I use that every day.
Indeed, I’ve long been distrustful of fiat currency — paper money backed only by the government’s word.
And if you take a glance at our leadership in Washington, or our ever-growing national debt, you’ll probably understand exactly why that is.
If you remember how bad things got during the 2008 financial crisis (which led to Bitcoin’s initial creation) you’ll understand it further.
So, if I’m that skeptical of greenbacks, you can imagine how I felt about a digital currency.
Nevertheless,the hype around Bitcoin is impossible to ignore.
Apple co-founder Steve Wozniak said recently that it's a better standard of financial value than gold or the U.S. dollar.
“There is a certain finite amount of bitcoin that can ever exist. Gold gets mined and mined and mined. Maybe there’s a finite amount of gold in the world, but cryptocurrency is even more mathematical and regulated and nobody can change mathematics,” Wozniak said.
Peter Theil, the venture capitalist and early investor in Facebook and PayPal, recently said something similar:
"Bitcoin is mineable like gold, it's hard to mine, it's actually harder to mine than gold. And so in that sense it's more constrained… I'm skeptical of most [cryptocurrencies], I do think people are a little bit… underestimating Bitcoin especially because... it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments… If Bitcoin ends up being the cyber equivalent of gold it has a great potential left."
And as much as I love gold, I have to say they're right.
By its very nature, the Bitcoin supply decreases.
The amount of bitcoins that a successful miner receives is cut in half every four years. It began at 50 bitcoins and was last cut to 12.5 in July 2016. This will continue all the way through 2140, when the system reaches its absolute limit of 21 million bitcoins. More than half of the finite amount is already in circulation.
You don’t have to be a financial wizard to understand what shrinking supply and rising demand mean for any commodity, or currency in this case.
So, ultimately, I shed my suspicious and gave Bitcoin a chance. I bought in.
And so far, I haven’t been disappointed.
Even if you got in late in the game, Bitcoin has absolutely killed it.
It has smashed other asset classes, surging almost 400% since January. It was trading at just $400 last year. And earlier this month it hit $6,000. And just hours ago hit reached a new record high of $6,612.
“Bitcoin Millionaires” are being born overnight, as more than $2 billion in funding pours into hundreds of new cryptocurrency projects.
Yes, there are others — Ether, Dash, Litecoin, Monero, QuarkCoin, Ripple, and more.
But Bitcoin still accounts for more than 50% of the $5 billion cryptocurrency market.
It’s also the most widely accepted.
More than 100,000 businesses now accept Bitcoin as payment, including CVS, Overstock, Subway, Tesla, Expedia, Whole Foods, Home Depot, Apple, Macy's, Sears, JCPenney, Gap, Microsoft, and Dell.
And Bitcoin ATMs are popping up everywhere.
At the end of 2013, there were just five Bitcoin ATMs in the world. By 2015, that number had grown to 500. And today it’s over 1,700. Essentially, the number of Bitcoin ATMs is growing exponentially every year.
Who knows how many there’ll be by the end of this year or next; but they’ll probably number well into the thousands.
It’s gotten that big.
But, of course, no matter how big Bitcoin gets, the skeptics remain.
JP Morgan CEO Jamie Dimon just embarrassed himself lashing out at Bitcoin and other cryptocurrencies in September, only to backtrack a month later, revealing his firm is launching its own blockchain-based payment system.
JPMorgan isn’t alone, either. Every major bank is interested in using blockchain technology to make trading and money transfers faster, safer, and more efficient.
They just don’t like Bitcoin because it’s cutting into their business.
The fact is, every Bitcoin critic to ever walk the Earth has ended up looking like an idiot.
And the longer they wait to climb on board, the dumber they’ll look.
Despite its recent gains, there’s still tremendous upside for Bitcoin. Investors could certainly choose to hold it, even if they never intend to actually use it.
That’s the worst-case scenario — a new digital commodity that offers the same store of value, but more utility than gold. In the most bullish scenario, the U.S. government defaults, the Eurozone breaks up, and people suddenly realize the paper in their pockets isn’t worth a damn thing.
What happens then?
All of this is to say: The Bitcoin boom is real. And if you haven’t gotten started yet, it’s probably time you did.
A good way to do that would be to check out this offer from Palm Beach Capital…
It's literally giving away a million dollars' worth of Bitcoin. So if you’re worried about the price and the risk, you can actually get it for free. It's also offering a “Cryptocurrency Academy” video training series to fill you in on anything more you need to know.
You should definitely check that out if you’re interested in making the jump.
Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of Wall Street's Proving Ground, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page.
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