So the question is, is Bitcoin a
good investment?
You see, since the beginning of the
year Bitcoin is up over 60%,
and especially in the past two
weeks, cryptocurrencies
got a boost. So in this video
right now, I'll show you the pros
and cons of investing in
cryptocurrencies like Bitcoin
so that you can decide whether
crypto trading is for you.
So let's get started.
So the fascinating world of
cryptocurrencies.
Now before we talk about the pros
and cons of investing in
cryptocurrencies like Bitcoin,
let's talk about what it
is. So what is Bitcoin or
cryptocurrencies in general?
You see, I'm using Bitcoin here
because it is the most popular
cryptocurrency there is.
First of all, it's a digital
currency.
This means there are no bills,
no coins. So you don't have a
one-dollar cryptocoin,
Bitcoin or you don't have a ten
Bitcoin bill or
something like this.
It doesn't exist. It only exists
in cyberspace.
So it was introduced since
2008 by
somebody, and we don't know if this
is a person or if this is a
group of people and
the name is Satoshi
Nakamoto.
You don't need to know this, but you
need to know the idea behind
Bitcoin.
So the idea was to have
a worldwide decentralized
system.
And the idea was that this is
much better than being a system that
is controlled by banks
or the government because this is
where many people say that banks and
government can manipulate
currencies. And especially right
now, we are seeing that governments
all around the world basically
put the printing presses into
overdrive and are printing money
like crazy.
Now, this is also where Satoshi
Nakamoto said that there will be
no more than
20 million Bitcoins.
So that's it.
So Bitcoins are being mined
and there will be no
more per definition than 21 million.
So it is not possible to
artificially inflate it or
by just mining more and more
Bitcoins. And by the way, the mining
shall be completed,
I believe, by 2140
or 2040, not quite sure.
So I would have to look this up.
So don't quote me on this one.
Anyhow, what we want to talk
about right now is, is
this a good investment, right?
I mean, people like to invest in
gold. And here the question is,
does it make sense to invest in
Bitcoin?
So let's talk about the pros
here. First of all, people who love
investing in Bitcoin say, "You know
what? It is a great investment
because it can
only go up." And here's
what they are arguing.
They say, "Because we have a
limited supply." And that is true.
There will be only
21 million Bitcoins.
There cannot be more than 21 million
Bitcoins. The algorithm is
programmed this way that
there can't be anymore.
Secondly, the pros of this is
that it can't be inflated
by printing more money, right?
And you know that this is what's
happening right now all around the
world to get through this pandemic
right now. Governments around the
world are printing more money.
So we might see in some currencies
inflation, deflation.
I mean, all the good stuff that
everybody tries to avoid in the
first place.
So also, number three, everybody
says, "Well, you know what?
It's the new currency." That's why
they say, you know what?
These days, if you think about it, I
mean, we are pretty much
already paying cashless, right?
I mean, credit cards are being used.
Now we have Apple Pay, for example,
where you can pay with your phone.
So in order to arrive
in 2020, this is where everybody
says, "Well, you know what?
It is the new currency here
and everybody should get used to
it." But let's talk about the cons
here, because it's also important
that you know this. And then, as you
can see, I'll give you a summary of
what I think, whether it makes sense
to invest in Bitcoin or not.
So, first of all, the assumption is
it can only go up.
And this is
where I say, "Hell no!" Let's take a
look at the chart here.
So here we have a chart of Bitcoin
and if you're going back to the
beginning of Bitcoin again, it
started in 2008, I believe
that the paper was published and
then it started trading.
And at first, it was only trading at
a few cents. I don't have enough
data here, but you get the idea.
And then at some point in 2017,
you see here, Bitcoin got
so popular that it went from
a few hundred dollars to more than
$20,000 per one Bitcoin
in a matter of weeks
as you can see here.
But then what goes up must go down,
then it crashed all the way down to
$3,500. And right now
we are trading at
$11,300. But as you can see, the
assumption that it can only go
up is not
a valid assumption, because in order
to do this, yes, there is
limited supply, but what do you need
for price to go up?
You need demand, right?
And this means that it would need
to be widely accepted
as a payment mean.
And right now this is not
the case, and I'll give you some
stats here in just a moment.
Now, it can't be inflated by
printing more money that is true,
right? I mean, this is built into
the algorithm, but then also
that it is the new currency.
Well, I don't
know, because, again, it was
introduced in 2008,
actually. Gained really popularity
in 2017 because
in 2017 it went from a few
hundred dollars to
$20,000. But you see, as of right
now, Bitcoin is only
0.4% of the world's money.
And now you might say, "Well, this
is only Bitcoin.
There are way more
cryptocurrencies." Which is true
but all cryptos combined
only account for
0.7%. So it's not really
the new currency just yet.
Now, not saying that it couldn't
happen, but let's talk about whether
it makes sense for you
to invest in Bitcoin and
whether I'm personally investing in
Bitcoin or not.
First of all, I am a trader,
so I'm always curious can we
trade? Is this good
for trading?
Meaning that you're entering and
exiting within a few days.
And actually you need to know
that it has lots of volatility.
So right now, it moves
4% per day on average.
So that's a lot, right?
So within a few days, it can move
10% - 15%
in your favor as well as
against you. But let's talk about
actually whether it is good for
investing. Because this is where
most people, when they look at
cryptocurrencies, they say, "You
know what? Why don't I invest a few
thousand or a few
$10,000 into Bitcoin or
a cryptocurrency?
And then well everything will be
fine, maybe in 10 years or in
15 years, it will be at
some say a $100,000."
But let's talk about it again.
We know that the limited supply
is good, but it needs
to have demand.
And in order to have demand, it
needs to be widely
accepted.
Now, think about it this way right
now, a coffee if you're buying
a coffee at Starbucks, it would
be $4, right?
Easy enough. So in order to pay for
a Bitcoin, it is 0.000363636
BTC, Bitcoin.
Now, let me just come back to you
really for a moment on fullscreen.
How many zeros did I have there?
Two, three, or four?
You get the idea.
You see, it's really difficult for
us to think this way.
And now you might say, "Well, it
doesn't really matter because it's
all electronic and we pay with the
phone." Well, first of all, we need
to get used to the idea that
a coffee costs 0.0003636
Bitcoin here.
The other thing is it might
at some point replace other
currencies or gain more traction.
But right now, keep in
mind, you can't touch it.
And for many people, this means,
is it real, right?
If it doesn't exist, if you can
touch it like gold, for example.
Gold, when you buy it, you can put
it in your safe.
Silver, you can have silver coins
you can put into your safe.
Money, you can have money, you can
put it in the safe.
I mean, cryptocurrencies you can't
put in your safe. And for some
people, this is deterring where they
say, "Well if I can't put it in a
safe if I can't touch it, it is not
real." Again, just keep
this in mind, thinking about
whether it will be widely expected.
And also there's lots of
competition.
So right now there's 1,300
cryptocurrencies and there's more
introduced every year.
So now the key question is here,
will there be a better one than
Bitcoin and will maybe
one other rise to the occasion?
So in summary, what do I personally
do? Well, I personally do not
have any bitcoins.
I'm not invested in bitcoins and
right now I don't really see that
Bitcoin is about to take off
in the next year or two.
It might be in 10 years, in 20
years, in 30 years.
Who knows, right?
But right now, I don't think that
it is a good investment.
Also looking at the chart, I do
believe that the ship has already
sailed.
Yeah. Going back, I mean, it would
have made sense to invest in
cryptocurrencies when they were only
a few hundred dollars.
Now that it is $11,000,
sure, it could go all the
way to $100,000, as some
say, or it could crash and burn
and go back to $3,000 or
$2,000. So it is a super, super
risky investment.
Now, again, I don't believe
that Bitcoin is a great investment.
I believe that there's other
possibilities, better investments,
or as you know me, I believe
that when you're trading, you will
run circles around Bitcoin
traders.
Anyhow, hope that this was helpful,
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