This post Get Ready for Bitcoin Mania 2.0 appeared first on Daily Reckoning.
Right now bitcoin (BTC) is back above $8,000 after suffering a substantial “flash crash” last week. This is a major milestone that I’ve spoken about quite a few times this year.
It signifies that the bottom is over and that we’re now in the beginnings of a choppy bull market.
Of course, we will continue to see dips in the market. But the highs will get higher and higher.
Fortunately for investors in bitcoin, while that’s up all the other cryptos are down. Any dips in prices create opportunity for those looking to accumulate.
To top off bitcoin’s news, it looks like Fidelity will enter crypto trading within a few weeks.
Add this to TD Ameritrade and E-Trade’s recent move into crypto and suddenly you have almost 100 million brokerage accounts with access to crypto.
And this doesn’t even take into account all the on-ramps that are being built for institutional money to enter the space
This is an exciting time for anyone invested in crypto. And with bitcoin skyrocketing higher, I want to address some of the most frequent questions I get asked about it:
FAQ:
(Q) What is backing bitcoin? Gold, for example, is REAL.
Gold is a rock. It doesn’t have any real intrinsic value. All money is money because people agree to use it. Same with gold. It’s only “real” because many people agree that it is.
(Q) What if the government hates bitcoin?
Doesn’t matter. Bitcoin is already a worldwide resource owned in every country, $150 billion worth.
And by the way, my extensive networks in the Intelligence Community of the U.S. government show MASSIVE interest in bitcoin to get cash overseas undetected. One of the biggest owners of bitcoin is Uncle Sam.
(Q) What about all of these hacks stealing bitcoin?
The exchanges we’ve recommended for bitcoin have never been seriously hacked. And those that have (like Binance recently) have responded quickly and resolved the issue.
Plus, the NYSE, Microsoft and Starbucks are building their own exchange (which will be unhackable and backed by their insurance), along with Fidelity.
(Q) Don’t all the best investors hate bitcoin?
Not true. Marc Andreessen, Peter Thiel, Tim Draper, etc.
(Q) Will companies use bitcoin?
Every Fortune 500 company from Walmart to FedEx to JPMorgan to Goldman Sachs is already using bitcoin and/or blockchain in one form or other.
(Q) But still, what is BACKING bitcoin? The dollar has the faith of the U.S. government.
- 10,000 years of math and computer science that have won Nobel-level awards
- The full power of contract law
The fact that hundreds of billions of dollars are already invested by top investors who are trusting bitcoin over any country’s fiat money.
(Q) Why did bitcoin fall?
Like any financial innovation, there are booms and busts. Prior examples of booms and busts in financial innovation:
- Junk bonds in the ’80s
- S&L institutions in the early ’90s
- Massive leverage in currencies in the mid-’90s
- The internet IPO boom of the late ’90s and early ’00s
- The securitization of energy in 2000–01 (Enron, etc.)
- The mega-securitization of housing derivatives in the mid-’00s
- EVEN the South Sea Co. bounced back to become bigger than it was in its bubble in the 1700s (see my book Trade Like a Hedge Fund).
AND the internet came back and is now worth trillions. Local banks are bigger than ever. Currency trading is larger than ever. All of the energy companies are bigger than ever. Housing is higher than ever.
Bitcoin will bounce back and be higher than ever. There’s never been an asset that had this much money invested that went to zero.
(Q) What about all the s***coins?
I estimated on CNBC that 95% of alt-coins were scams. Since then, 80%-plus of all coins have gone to zero, with more to come. I was the ONLY one predicting this. NONE of the coins I follow has been a scam. I do the research.
(Q) Where is bitcoin going?
Just like gold replaced barter, paper money replaced gold and fiat money replaced paper money (backed by gold), digital currencies will replace all fiat money in the world. Why?
EVOLUTION IS AN UNSTOPPABLE FORCE AND HAS WORKED IN EVERY INDUSTRY.
Bitcoin solves all the problems of paper money: privacy, forgery, human error, excess fees, intermediaries, lack of trust, trade finance, etc.
There is $15 trillion worth of fiat money in the world. There is $150 billion worth of bitcoin.
One day, ALL fiat money will be replaced by bitcoin.
And since the supply of bitcoin is FIXED and demand is going to go up 10,000% (the difference between $15 trillion and $150 billion), then bitcoin’s price will be $7,800 (current price) times 100 = $780,000.
Bottom line: If you’ve been on the sidelines up until now waiting for the next bull run to start, now’s the time to jump on board!
Regards,
James Altucher
for The Daily Reckoning
The post Get Ready for Bitcoin Mania 2.0 appeared first on Daily Reckoning.