As we dive into June and we look at some market correction and setting a foundation for future growth. I wanted to take a step back and go to the beginning of why people buy Bitcoin in the first place or, as a personal opinion, why I would be a buyer of Bitcoin or some cryptocurrencies for my portfolio in order to have a well-diversified holding for wealth building.
Right now we are going through what some people may call a third cycle in the evolution of Bitcoin. After 10 years of being to market, we’re seeing this new public adoption.
Facebook’s launch of its global stablecoin cryptocurrency will allow for payments to be processed across border and settled into whatever national currency you want to settle their stablecoin into.
They’ve been working with some former executives from Coinbase. The leader of their blockchain project sold their payment processing company to PayPal for $240 million a few years ago. So they’ve created this blockchain-based stablecoin adoption that will allow for all of us to buy and sell on Facebook in more secure manner.
So when you look at the 5 primary reasons to want to have cryptocurrencies, primarily blockchain, in your portfolio:
1-This type of adoption allows for capital to flow in a more seamless public manner.
2-Regulation. For a product that’s 10 years old or a currency that’s 10 years old, there’s still some lack of transparency on where regulation’s going to go with a lot of different aspects of the industry, and as those items become more settled, it’ll allow people to be more comfortable with the asset and allow you to have a greater opportunity for increase in value.
3-Wall Street going crypto. There’s a lot of articles out now that are tracking the wallets that are continuing to buy and hold Bitcoin in them, and that there’s, there’s some association with those wallets in Wall Street or financial institutions. Fidelity is about to launch Bitcoin trading on their brokerage platform, which is a really big deal. Once you break down that barrier between Bitcoin and other capital assets, you’re going to have an opportunity to see the increase in value because of limited supply.
4-Developers in Bitcoin are still working. They’re continually updating the core blockchain that allows Bitcoin to function. So, over time it’s going to continue to get better, and it’s going to diminish the need for those secondary assets and continue to increase demand for Bitcoin.
5-In May of 2019, Bitcoin had the highest trading volumes of all time. Now, it’s not back to its all-time highs that were driven by speculation in 2017… Again, that is my personal opinion, but that trading volume is showing an increased interest again. With increased interest at a limited supply item that has new regulation that’s making it easier for people to access while more parties are coming to market, you have all of the things that you need in order to show an increase in value over time. This makes Bitcoin a great addition to any portfolio if you’re willing to take the risk associated with a 10-year-old asset class.
The trade wars are expected to have an impact on Bitcoin from the perspective of if they get worse with the trade, U.S. putting some tariffs in place against Mexico potentially, the continued ratcheting up of rhetoric between the U.S. and China, we’re seeing for the first time a real interest in Bitcoin as a stable… I’m sorry, as a protection against downside macroeconomic risks.
Kodak who last year made a huge announcement that they were going to be moving all of their file storage onto blockchain and creating new types of currencies that you’ll be able to use to share and buy rights to photos. They’re expecting that their blockchain product will save them between 20 and 40 percent in operational costs. Visa has been working on their blockchain solutions.
Bitcoin is the core asset in this class, is recommended to be part of anyone’s portfolio. Do your own research and stay up to date by subscribing so that you can get this info each month. And if you’re looking for a way to buy crypto through your self-directed IRA, reach out to the team at Equity Trust and talk to them.
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