What is Bitcoin?
Bitcoin is a digital currency that exists purely online. Its origins trace back to 2009, from a white paper published online by a mysterious person operating under the pseudonym ‘Satoshi Nakamoto’. This digital currency is a complex beast, but at its core it is anonymous, borderless and efficient. It’s the new ‘alternative’ financial system that’s a threat to government and the current global banking system.
What’s the deal with the price of Bitcoin?
Since 2009 bitcoin has been on an incredibly rollercoaster ride. At it’s very beginning you could ‘mine’ bitcoin when it was worth just one-tenth of a cent (in US dollars). Then in 2013 it went on an incredible run, peaking at US$1,150. That’s a return of around 115,000,000%!
It subsequently crashed to be worth around US$220 at the end of 2015. But it’s been on a steady trajectory higher in the last year and a half. And now in the first week of March 2017, one single bitcoin has been consistently trading higher than the spot price of an ounce of physical gold. One bitcoin is now worth US$1,278. On ounce of gold is worth US$1,229.
What now for the price of Bitcoin?
Expect to see further volatility. There’s a landmark decision coming soon about whether or not the Winklevoss Twins (of Facebook infamy) are legally able to operate the world’s first bitcoin ETF.
It will have an impact on the short-term price of bitcoin. But longer term, expect bigger and better things. I’ve repeatedly said that the long-term purchasing power of bitcoin could go as high as US$50,000 or even US$100,000.
It’s a world full of turmoil, potential trade wars, currency wars and maybe even physical war. But with bitcoin you can control your (digital) money and keep it safe. You can store it away from the grubby hands of government. And, longer term, as it becomes a widely accepted unit of exchange, the purchasing power of one bitcoin could skyrocket.
But I’ve always said that you should treat it for what it is, a unit of exchange in the digital world. Don’t aim to convert it or trade it back into fiat currency. Get yourself some bitcoin, and keep it within the bitcoin system. While some are calling it ‘digital gold’, the truth is it’s more than that — it’s the ultimate antiestablishment financial instrument. And if you’re prepared to ride the rollercoaster, then you absolutely need to get some bitcoin.
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