Is Crypto Still Worth the Punt?

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Wind back the clock to 9 January 2009.

Do you remember where you were? Do you remember what you were doing? Probably reeling from the ongoing debacle of the ‘GFC’ or ‘Debt Bomb’ of the ‘Massive Banking Stuff Up’.

One thing is likely though. Back then, you probably didn’t know what bitcoin was?

Nope? That’s okay, not many people did. I didn’t. My entrance to this crazy world didn’t come until the next year or two.

But while most didn’t know about it, some did. Some were using it, trying it out, and testing out its potential. Some had even theorised it could become immensely valuable.

Like the late Hal Finney.

Finney was deeply involved in bitcoin in its early days. Way back as far as before it even went live in January 2009. There’s even suggestion that he could have been the mysterious Satoshi Nakamoto. I tend to think that’s unlikely considering the language used in those original threads.

But something Finney did note on 11 January 2009 was:

As an amusing thought experiment, imagine that Bitcoin is successful and becomes the dominant payment system in use throughout the world. Then the total value of the currency should be equal to the total value of all the wealth in the world. Current estimates of total worldwide household wealth that I have found range from $100 trillion to $300 trillion. With
20 million coins, that gives each coin a value of about $10 million.

An amusing thought experiment indeed.

 Sam thinks that ‘we’re still at the ground floor’ of the cryptocurrency market. To learn more, download this free report.

Big money BTC wallets

Finney is a little way off right now. But bitcoin is well and truly on its way to perhaps one day fulfilling that prophecy.

Having said that, back then bitcoin was worthless. There was no real network, only a few users, and you couldn’t really do much with it other than send it from wallet to wallet.

But then more users came to the network. And soon enough you could buy and exchange it. And by mid-2010 bitcoin had a value of around US$0.01.

People like Finney were also early miners of bitcoin back then. That was when you could do it using a CPU and any old computer. Those early proponents mined loads of bitcoin.

The block reward was 50 BTC and you could comfortably mine a few blocks every month or so. It didn’t take much to rack ‘em up. Hundreds — even thousands — of bitcoin in the early days could be mined or bought on the cheap.

For example on 1 March 2011 a bitcoin wallet, 1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb6uF, received 79,956 BTC. At that time the grand total of that stash was $74,363.

By 17 December 2017 the wallet now had 79,857 BTC in it and was worth over US$1.5 billion.

I’ll help with the maths on that — it’s a 2,017,032% gain.

Here are the holdings of some other large BTC wallets:

  • Wallet 12tkqA9xSoowkzoERHMWNKsTey55YEBqkv currently holds 28,151 BTC
  • Wallet 1PeizMg76Cf96nUQrYg8xuoZWLQozU5zGW currently holds 19,414 BTC, and
  • Wallet 1f1miYFQWTzdLiCBxtHHnNiW7WAWPUccr currently holds 10,009 BTC.

At current market values, those wallets hold a US dollar value of:

  • US$285 million
  • US$197 million
  • US$101 million

These wallets had the large amounts enter them in 2010 and 2011, a long time after bitcoin actually started. And there’s something about that which is relevant to today’s market as well.

Of course I’m going to again take a wild stab in the dark and say none of those are your bitcoin wallets. You might not even have a bitcoin wallet yet or any bitcoin. And considering now to even get just one bitcoin is going to cost more than AU$15,000, it’s not an easy task.

Most people now, new to this space, new to bitcoin, will never own a whole bitcoin.

And there’s bad news and good news about that.

The bad news is that if you still don’t own bitcoin, you’ve missed some of the biggest returns on an asset class in the history of everything.

Sorry. That’s just the lay of the land. Of course, some may have also lost out on bitcoin.

That’s not to say the ride is over for bitcoin.

Quite the opposite in my view. There’s still more to come. But will we see the 2,017,032% returns going forward? I doubt it. For that to happen, one bitcoin would end up being worth more than AU$306 million.

Not even Finney’s amusing thought experiment was that bold!

However for all those juicy gains you may have missed, how would you feel if you had another chance?

We know that history doesn’t repeat…at least not exactly as it has come before. But sometimes we can take lessons learnt from the past and see them unfold in our future.

And sometimes we get a second tilt at a massive investment story.

I believe that right now that chance is unfolding before investors’ eyes.

But the key to take away from today’s essay is you’re not too late on these new opportunities. Not yet at least. But if you wait too long, you might be.

It’s already moved up over 160% in the last month alone. But even from where it is today, I believe it could hit new heights. The kind of heights we saw with some cryptos in 2017 and 2018.

If it mirrors the kind of rises we saw with Ethereum during that period, that could result in a value spike around 76 times higher than where it sits now.

Seventy-six times.

Yeah, I know. It’s not 2,017,032%. And whilst such a rise is never guaranteed, if you had a chance at 76 times your initial outlay, would you really say no to that opportunity?

Crypto is the ultimate punt

Now I will say that this kind of punt isn’t for the risk-averse. You need a strong stomach for this ride and you need to know, understand, and embrace the risks. We’ve seen wild value fluctuations that have resulted in some crypto being worthless.

That’s the kind of risk on the table with all of this. And it’s why we always encourage people when they join us on this ride to manage your capital wisely. I call it ‘sleep at night’ capital.

That’s money that if it became worthless, with a $0 value, you’d not lose any sleep over it.

And some people step into this opportunity with as little as a few hundred bucks. $500 is a lot of money, but for example, if you put that into these opportunities and it went down to $0, would you lose a lot of sleep over it?

If it went to $38,000 though and you didn’t take a punt on it, how would you feel then?

This is the ultimate in risk/return trade off. And again, something you need to very seriously consider. That’s why I have a crypto advisory service where we step you through the risks, the potential, and how to navigate the crypto world.

It’s also why I wrote, and recently updated for 2020 my introductory book to the world of crypto, Crypto Revolution: Bitcoin, Cryptocurrency and the Future of Money.

I think everyone should understand where crypto comes from. You should know what’s happening now. And you should make some time for ‘amusing thought experiments’.

I think then you may realise, maybe this thing is actually worth a punt. That’s what it is. It’s a bit of a punt, but a punt on a technology revolution that’s already changing the world. And already delivering massive returns to those willing to take on the risk and have a go.

You’ve just got to decide what steps you take next.


Sam Volkering,
Editor, Money Morning

PS: Right now could be the BEST time to buy into this revolutionary market. Just like investing in some of the tech-superstars during the early 2000s, you need to realise that there’s still ‘plenty of room for you to build up a sizeable crypto fortune’ in the years ahead. Click here to learn how to buy your first bitcoin.

About Sam Volkering

Sam Volkering is an Editor for Money Morning and is small-cap, cryptocurrency and technology expert.

He’s not interested in boring blue chip stocks. He’s after explosive investments; companies whose shares trade for cents on the dollar, cryptocurrencies that can deliver life-changing returns. He looks for the ‘edge of the bell curve’…

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