BitBoy Ben in his new video has explained why Bitcoin is the safest and most surefire way to invest in cryptocurrencies despite the noise about other cryptos. Looking at the basics of investing in Bitcoin, Ben covered four questions to help guide both new and old investors in Bitcoin.
What is Bitcoin?
Ben says Bitcoin is a digital asset not currency as believed by many. Just like stock, bond, gold, shares but a special kind of asset called store value. After the 2008 financial crisis, an anonymous person dub Satoshi Nakamoto created Bitcoin — a peer to peer electronic cash system.
The original intention for Bitcoin was to be a currency, we can all send directly to each other without the need of a third party like a bank or credit card processor. The decentralized currency was built on Blockchain technology, no party or entity could have access to make changes to the network meaning it will be extremely secured.
There are only 18.6 million Bitcoin in circulation and there will only be 21 million and they will not make it into the circulating supply until 2140. New coins come into the supply through Bitcoin Mining — specially designed computers solving hard problems in order to earn fractions of Bitcoin. While the value proposition of Bitcoin has changed from money to a store value, the same thing rings true, it is the greatest asset we have ever seen in the history of the world.
Is it too late to invest in Bitcoin?
Bitcoin is the greatest appreciating asset in history, it has made over 100,000% gains since 2011. Bitcoin basically broke the investment paradigm up 421% in the last three years alone.
Why is Bitcoin the safest crypto currency to invest in?
Any coin other than Bitcoin is called altcoin. They have more reward than Bitcoin but they also boast much more risk. The value proposition of Bitcoin should continue to increase following halving events. Bitcoin Halving is where the amount of bitcoin produced through mining gets cut in half every four years, this prompts Bitcoin price to play out pretty much the same way every four years. The supply resolve and price starts dropping about a year and half after those halving events. Bitcoin drops average 85-87% every bear market every four years. The current Bitcoin bull run according to Bitcoin bull cycles should end around September-October 2021.
How do you invest in Bitcoin?
There are 3 ways to buy Bitcoin but the best is to buy on a site or exchange where you have the opportunity to own your own assets not let it sit in the hands of others. Binance, Coinbase are the top exchanges to buy from. Another way to buy Bitcoin is through third party apps and sites like Robinhood and PayPal, investing in Bitcoin through these places, you are basically investing in a derivative version of Bitcoin, you own them on PayPal, Robinhood etc. you can not withdraw these assets. The third way to invest in Bitcoin is through Grayscale Bitcoin Trust (GBTC) on the stock market and each share of the stock is backed by Bitcoin owned by Grayscale.
Ben says investing in Bitcoin stock is a great way for traditional investors to get into Bitcoin and Crypto as they serve as bridges to get investors into a place where they can study and understand the potential of crypto as well as its importance.
How can you invest in Bitcoin and make live changing wealth? The key is to remember the cycles. The current bull market will come to an end and it will be best to move into stablecoins — these are coins where the price is stable no matter what the overall direction of the market is. Another option is you can move to cash, gold or stocks when the crypto market drops and consolidates.
This episode premiered on February 19th, 2021.