With every rise in the price of Bitcoin, the believers and evangelists are currently experiencing Bitcoin bliss and Crypto nirvana. And a sort of vindication as well against all the naysayers, as if anyone really cares.
After the collapse of Bitcoin at the end of 2018 that ended in the “crypto winter”, the hope of a rebound had faded to a trickle. From its ascent to the gravity-defying and magical near $20,000 peak, Bitcoin eventually endured an unstoppable free-fall to almost $3,000 and Bitcoin-bashers were not only predicting the end of Bitcoin, but even all of crypto. Some of the most respected and well-known economists like Nouriel Roubini even said that Bitcoin has no intrinsic value and would go all the way down to zero.
But that didn’t happen. On the contrary, almost 2 years later and Bitcoin is heading again “to the moon”, a term much used in the crypto world and now even becoming a reality. Breaking records just about on a daily basis, its upward curve - almost vertical trajectory - is every Bitcoin “hodl’er” (holder’s) dream with some even predicting a Bitcoin price of $300,000 by year’s end 2021. Even reputable financial powerhouses like JP Morgan and Citibank have jumped on the crypto bandwagon as well as many other reputable financial institutions have boarded the gravy train of massive gains in Bitcoin’s value. But every rave and rush eventually comes to an end and a shooting star turns into a falling star. On Monday morning of January 4th, there’s was a sudden crypto flash-crash that plunged Bitcoin from a near $35,000 high to just below $29,000, a massive drop of almost $6,000 within a few hours
Bitcoin diehards and hopefuls say it’s just a retracement that will be followed by a rebound. But Bitcoin-bashers once again predict Bitcoin doom and Crypto gloom, concluding that Bitcoin will head south once more, this time for sure, all the way down to zero.
In a funny Twitter post, Peter Schiff, a famous American stock broker, financial commentator, and radio personality, alludes that “people must be smoking something” in relation to the crazy swings of Bitcoin and for believing in its value.
But he does have a point somehow; Bitcoin is controlled by Bitcoin “whales” - the billionaire mega-owners – and Bitcoin mining syndicates that are nearing “cartel-style” control and manipulation of Bitcoin.
Yet Bitcoin is not dead - or any other crypto for that matter - except for the SEC spoiling the Crypto party and Bitcoin rave by suing XRP for the unprecedented $1.3 billion in relation to an “unregistered securities offering”.
This matter will drag on in the courts for many years to come but in the meantime, it did reverse some Bitcoin “insta-millionaires” into “insta-broke”, except for those that had sufficient reserves and stepped into the Bitcoin dance at a much earlier stage (and much lower Bitcoin price), they are just licking their wounds so to speak.
The old saying in the investment world always resurfaces when prices are peaking:
Buy on the rumour, sell on the news.
In the case of Bitcoin, by the time the news made headlines, it had already dropped like an atomic bomb in the South Pacific and everyone was running for cover once again.
Whatever the Bitcoin evangelists and bashers may say, fact of the matter is that Bitcoin is extremely volatile and you are playing with fire. If it goes good, you can make a fortune, if not, you can lose a fortune and much more.
Bottom line, if you can’t suffer the pain of hard losses, don’t get involved with Bitcoin or any crypto for that matter. If you are absolutely intent and hypnotised by “Bitcoin-to-the-Moon”, then only invest an amount that you absolutely and decidedly can afford to lose. Don’t bet the farm or family heirlooms, it can backfire and explode like a Tesla rocket on landing. The difference being, Tesla can rebound from great misfortune and setback, most of us retail investors can’t.
Genesis technologies are foundational and transformational technologies like electricity and the internet. These technologies not only have changed our lives in every way, they have impacted the entire world as well as the global economy.
The internet - still powered by big tech - has affected every aspect of our lives and the smart phone has compacted everything in the palm of our hand.
From the comfort of our couch, we can do just about anything with our little hand-held mini-computer, that is, our smart phone. Powered by ever-increasing computing power and a whole universe of apps, we can do all sorts of things and that includes banking, trading and investing. Security is a primary concern, but hacking even more so. Too many crypto wallets have been hacked and emptied in recent past that many crypto traders store their private keys and wallet addresses on “cold storage”, these are usually small portable devices like USB sticks that are disconnected from the internet and thus “unhackable” by definition.
Blockchain protocol changes all of that as it is irreversible and transparent.
For those that don’t know (and without going too deep on the subject matter), blockchain is a distributed ledger, interconnected through a global network of nodes (computers) that gets updated simultaneously every time a transaction is verified in a block. Once validated, this transaction is irreversible and transparent, everyone can go online and see the transaction on the respective blockchain (but not being able to determine who is behind the transaction). And it is exactly this feature that made Bitcoin “notorious” because of being used as a preferred “means of exchange” in criminal and/or illegal activities.
As a result of this “private and untraceable” feature of Bitcoin, it got a bad rep. And most other cryptos as well, although to a much lesser extent.
Ever since Bitcoin’s ascent to higher (and Holy) ground, its bad rep is no longer a real issue, major investment banks and financial institutions have gotten into the crypto game, buying and selling large chunks and in doing so, inflating the price to unseen highs. The side effect of this binge buying has been that it has given crypto credibility and with the SEC (Securities and Exchange Commission of the US) just recently relaxing regulations in relation to crypto, it has opened the door to crypto mainstream adoption and acceptance significantly.
The temptation now is to jump in, catch the big wave and surf all the way to the crypto crest but, every wave eventually comes crashing down every time around until the next wave appears.
Instead of trying to ride the crypto wave, just invest in the surfboard that is blockchain.
Blockchain technology, the underlying protocol marvel of crypto (as one of many other useful applications) is here to stay. Many experts and financial gurus even predict that blockchain will become the biggest single investment opportunity of a lifetime in the same sense as the internet that created the “information superhighway” (a term dating back from the early 1980s) and interconnected the entire world.
Blockchain will create the “Internet of Value” and as a result, transform the global financial markets and revolutionise the entire wealth creation spectrum. For business, commerce and trade, blockchain protocol will facilitate as well as simplify every transaction chain (and in the process, reduce or even eliminate the paper trail), the possibilities are seemingly endless. Everyone with a smart phone or computer will be able to transact with anyone in the world at a fraction of current financial transaction costs, safely and secure, without necessitating any intermediary.
Blockchain is revolutionary in every sense of the word and will significantly impact the world as we know it.
Do you homework, research diligently and seek out the little gems of blockchain technology companies now that soon will pay off Big Time, long before the “Big Bang in the Crypto Universe” coming upon us in the not-so-distant future.
This article and its contents do not constitute investment advice and should not be deemed as such. Please seek investment advice from finance professionals and/or certified brokers/dealers. Your hard-earned money is always at risk when trading or investing.
Eleftherios Jerry Floros is an author, speaker and consultant on all things crypto, tech and digital disruption.
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Eleftherios Jerry Floros is a FinTech Expert at Rethink Your Digital Future and founder of Elysian Impact Investing, a money super-app and impact investment platform powered by artificial intelligence, blockchain technology and data science. He is also an investor, entrepreneur, thought-leader, speaker and author with a 37 year diversified background in FinTech, finance, engineering, maritime and shipping. His main areas of interest are FinTech, impact investing, sustainable finance, entrepreneurship and digital disruption which is profoundly impacting the global economy as well as our personal lives. Mr Floros undertook studies at the University of Oxford, Wharton Business School of the University of Pennsylvania and the London Academy of Trading.