In 2016 invest in bitcoin

This little financial experiment has finally grown legit enough that it is something worth looking into. But before I continue, as a disclaimer to people who read this, I need to let you know that up until the 25 million venture capitalist funding of Coinbase in 2013, EVERY SINGLE business that was created based on Bitcoin (BTC) has been a scam. Every person who ever used bitcoin for something has been scammed. The only person who came out unscathed are those who got bitcoin and held on to it and did nothing. Or forgot about it until they read about it in the news again.

Which means that all the price moves before 2013 can be associated as scammers scamming new scammers.

 

Deflation

Today though, Bitcoin is known as the asset to be in when “fear” happens. It is a hedge against “bail-ins”, capital control and any state monetary intervention. It is also going to be a great hedge against inflation. The deflation facet of it has been greatly broadcasted for a long time but hasn’t been brought up recently since it has faded so much from people’s memory. The reason why 2016 is the year to put money into this, is because of the upcoming reduction in the “printing” rate of bitcoin (~July 2015 area). From a 10% per year rate to 5% per year rate. The event is not a gradual process and judging by the total market cap of Bitcoin, not many people are well versed enough to understand the significance of this event.

With 5% inflation rate, we can finally see some semblance of deflation when compared to fiat currency. Previously, the first halving of reward happened in December 2012, but the effect wasn’t felt until mid 2013 in the April time zone. It is not a direct cause of the rise in price, but it is one of the macro event that nudged the price ever so closely to the upward direction. In long term projections, every little bit of push helps.

Legitimacy

Unlike previously when I’d tell people not to touch it with a 12 feet pole. Today I recommend dabbling in it a bit. People from USA can take advantage of big names like Coinbase (big silicon valley venture capital funding) and the Winklevii’s Gemini to buy and sell bitcoin. You can also put it in your 401k with the ticker GBTC, albeit at a premium to the real price. The legit businesses nowadays have big names backing them and stand to lose a lot in reputation if they acted like the scammers before 2013. Politically, the government have also been bringing most of the worst scammers in recent history to justice albeit at an almost complete loss to end customers (sort of like Madoff).

What will happen in 10~ 20 years time frame is that bitcoin will probably be worth at least the same as Visa, or nothing at all. There’s not going to be an in-between. So the cautious thing to do is 1% of your asset in bitcoin in case that it does take over as a legitimate payment network. Treat it like the gambling part of your portfolio. 10 assets with chances of increasing 10x.

Finally

What I am saying is mostly regurgitated stuff. People know about this for years to come. But exactly how many knows about this and how soon it will happen no one knows. Every innovation has this dilemma. The news is always out there, but how do you know where in the bell curve you are in terms of early adapter curve? There’s a reason why I am only writing about this today and that is because I feel it is time and that Bitcoin is no longer just a big cesspool of scammers.

Disclaimer

This is a generic disclaimer I attach to all financial based posts to catch all disclaimers. I own everything I talk about. If you suspect I own something or have an Agenda just assume yes. Assume the worst. Assume I am not acting on your best interest.