Chances Are You’re Wrong about Bitcoin…
In today’s Money Morning…divided on bitcoin: is it a bubble or the future of money?…why should you bother understanding bitcoin?…and more…
Hi, Imogen van der Meer here. I’m the Managing Editor at Fat Tail Investment Research. We have a free report here at Money Morning by our crypto expert Ryan Dinse, titled ‘Five Biggest Bitcoin Myths Debunked’, which is soon to be published. It’s a must-read for anyone out there still on the fence about Bitcoin’s [BTC] legitimacy.
In fact, I think it’s such an important read that I’ve pulled out an excerpt for you today, where Ryan explains why bitcoin really is here to stay. Keep an eye out for the full report.
Divided on Bitcoin: Is It a Bubble or the Future of Money?
When it comes to bitcoin, a middle ground is hard to identify.
Debate about the cryptocurrency is highly polarised.
Why should someone who believes bitcoin is a technological gimmick with no intrinsic value think they need to read more about it?
And why should someone who believes bitcoin is the future of money bother with what critics have to say?
How can there be a middle ground between one camp deeming bitcoin worthless and the other the future?
So the two sides disperse to their silos…and hardly talk to each other, let alone productively.
In September 2021, Swyftx, a Brisbane-based digital currency exchange, ran a nationally representative survey of 2,800 individuals.
The survey found that despite its prominent standing as an adopter of cryptocurrencies, Australia remains a nation divided.
‘Australians are sharply divided on whether digital assets will overtake fiat currency. A third of Australians agree that cryptocurrencies are the future of online financial transactions, while four in ten disagree and a quarter are unsure.’
Additionally, 46% of those surveyed considered cryptocurrency an investment; 34% thought it a form of gambling.
A split populace doesn’t bode well for sober analysis.
So I hope this report helps bring balance to the discussion.
If we can dispel the common misconceptions, our discussion immediately improves.
After all, making headway is easier once the fog clears.
Why should you bother understanding bitcoin?
But why should you care about understanding bitcoin? Isn’t it just a fad? Why bother learning more about it?
Whatever your views on bitcoin and the wider crypto markets, you need to — at the very least — have a grasp on how it all works.
Increasing numbers of people are making it a part of their long-term plans.
In November 2021, Australia’s own financial services minister, Jane Hume, argued that both governments and industry should not fear the rise of cryptocurrencies.
Speaking at an Australian Financial Review summit, Hume commented:
‘So as an industry, and as a government, we need to acknowledge this is not a fad. We should tread cautiously, but not fearfully.’
The final report from the Australia as a Technology and Financial Centre (ATFC) parliamentary committee, released in October 2021, cited a survey finding that 17% of Australians already own cryptocurrency.
The report notes that this equates to about 3.4 million Aussies.
And an additional 13% of respondents said they plan to buy cryptocurrency in the next 12 months.
The report went on (emphasis added):
‘This makes Australia one of the world’s most significant adopters of cryptocurrencies on a per capita basis. The Australian Taxation Office (ATO) has noted a ‘dramatic increase’ in trading of cryptocurrencies and other digital assets by Australians since the beginning of 2020.’
And there are countless companies and major institutions racing to adopt crypto technology, including Tesla, Goldman Sachs, Visa, Mastercard, and at least 30 different central banks.
Source: Deutsche Bank Research
Just last November, the Commonwealth Bank of Australia [ASX:CBA] became the country’s first bank to let customers buy, sell, and hold crypto assets like bitcoin directly through the popular CommBank app.
That might be scary…exciting…or a little of both.
Whether you’re excited, scared, or annoyed, there’s no doubt you need to get to grips with how the world of ‘new money’ works.
It’s not going anywhere.
Some countries are even making bitcoin legal tender.
On 7 September 2021, El Salvador officially became the first country in the world to accept bitcoin as legal tender.
Other Latin American states like Paraguay, Argentina, Panama, and Cuba are considering joining El Salvador in adopting cryptocurrencies as official legal tender.
If we’re sober with our analysis of where digitisation is heading, we’ll accept that the technology underpinning bitcoin — blockchain — is here to stay.
After all, central banks the world over are now contemplating their own central bank digital currencies inspired by bitcoin’s digital blockchain technology.
Addressing one’s misconceptions about bitcoin isn’t easy, but it leads to more accurate and grounded beliefs on a topic that will only grow in importance.
As sociologist Duncan Watts observed:
‘When we challenge our assumptions about the world — or even more important, when we realize we’re making an assumption that we didn’t even know we were making — we may or may not change our views. But even if we don’t, the exercise of challenging them should at least force us to notice our own stubbornness, which in turn should give us pause.
‘Questioning our own beliefs in this way isn’t easy, but it is the first step in forming new, hopefully more accurate, beliefs. Because the chances that we’re already correct in everything we believe are essentially zero.’
Editor, Money Morning
Ryan is also editor of New Money Investor, a monthly advisory aimed at helping investors take an early-mover advantage as decentralised finance and digital money take over the world. For information on how to subscribe and see what Ryan’s telling his subscribers right now, click here.