The world is moving fast and keeping up with technology is key to thriving long term in the financial markets. Lately bitcoin has become a hot topic on the internet. So I’ve been scooping it up over the last few months. I mentioned this on Twitter.
The last time I blogged about buying bitcoin was in 2017 where I made a decent profit by pumping and dumping. However this time will be different. Instead of trading, I plan to buy and hold BTC as a long term investment. 🙂
I currently own 0.28 BTC. Why this number? Because according to analyst Jake Levison, 0.28 bitcoin is all you need to be in the top 1% of all bitcoin owners. 🙂
This amount represents less than 1% of my net worth. I can lose all 0.28 bitcoin and not care too much about it. But if the value soars then being in the 1% club should give my future purchasing power a significant advantage. I may buy more BTC on price pullbacks until it’s 2% of my net worth. 🙂
But this post isn’t about convincing anyone to buy bitcoin. There are plenty of other articles on the internet for that already if you search for them. To be honest I don’t fully understand bitcoin myself yet.
The point of this post is to outline the reasons why I’m adding bitcoin to my portfolio so readers know what I’m buying these days, and that I am biased.
Reasons why I’m bullish on bitcoin
- It’s a hedge against inflation because it’s a deflationary currency. Only 21 million bitcoin will ever exist.
- It’s been here for over a decade so it will probably stick around.
- Institutional investors and large fund managers have began to show interest in cryptocurrencies.
- Many macro strategists including Lyn Alden started to become bullish and are buying bitcoin this year.
- Widespread adoption in 2020. BTC is now compatible with mainstream financial services like PayPal.
- Governments have announced they want to adopt digital currencies. Central banks are creating their own.
- Citigroup bank says Bitcoin could be “the currency of choice for international trade” in the future.
- Goldman Sachs is restarting a trading desk for cryptocurrencies, offering BTC futures by March 2021.
But due to its speculative nature it’s hard to recommend BTC to someone who don’t already have some level of investment experience. It’s a good idea to build up at least $10,000 in stocks, ETFs, or other traditional assets before buying bitcoin.
There are also transactional fees to consider. If I take out my physical wallet and hand you $1, you will be $1 richer. But if I send you 1 BTC from my digital wallet, you will receive less than 1 BTC due to fees. This makes bitcoin difficult to use as a widespread currency.
And if you have trouble handling large price fluctuations then BTC is definitely not for you.
You know yourself better than anybody else. Don’t just follow what others do on the internet. Learning to develop your own strategy will give you more conviction and control over your financial outcome. The attitude to adopt isn’t who’s going to lead you. It’s who’s going to stop you! 🙂
How to buy bitcoin
There are many different ways to buy BTC. Coinbase is very popular in the United States. For Canadians I would suggest using Shakepay as it is what I currently use after comparing many different services. Just make sure you understand all the risks and talk to a financial expert before you buy anything.
Shakepay actually has a special promotion right now. If you use my referral link here, we will each receive a $30 cash bonus once you spend at least $100 on the platform.
So if you do conduct your own research and decide to buy BTC, then getting a 30% discount on a $100 bitcoin purchase is not a bad way to get into this space; most people have to pay full price. 😉 But this offer is only temporary.
Random Useless Fact:
Predators evolved to have better depth perception and focus for hunting. Preys have a wider field of view to better spot danger.