The rest of the world is now seeing what Bitcoin enthusiasts have known for a while: The digital currency is here to stay, it is a good investment, and, despite market fluctuations, it continues its upward trajectory.
As I write this Bitcoin holds more than $320 billion dollars of value, with each coin currently valued at $17,314. That’s good enough to make it the 19th largest asset by market cap in the world, according to AssetDash.com, the site which tracks global assets. The price of bitcoin has risen nearly 120 percent in the last year.
For non-investors–but those who might be interested in growing their money–an asset’s market cap is the combined value of all of its outstanding shares.
There are currently 18.5 million bitcoin in circulation, which means there are only 2.5 million left to be mined before the preordained 21 million will be mined into circulation, which will happen in 2040.
If all of that is a bit confusing for you, let me give you a bit of perspective. Here is a list of companies and assets, which hold less value than Bitcoin:
- Home Depot
- Bank of America
- Exxon Mobile
- McDonald’s (about half of Bitcoin’s value)
- Texas Instruments
- Anheuser-Busch (about a third of Bitcoin’s value)
- Lockheed Martin
- Wells Fargo
- American Express
And there are many more notables in the top 100 that don’t hold as much value as Bitcoin does.
(Bitcoin’s market cap has grown by more than $3 billion in the 20 or so minutes that I have been writing this article.)
The arguments against investing in Bitcoin
Bitcoin has no intrinsic value
To this, I beg one simple question: What intrinsic value does the dollar have? None. It is based on nothing, and it is nothing but the promise of something that people agree has value. Bitcoin is no more or less than that. People agree that it has value, which gives it value, and right now Bitcoin is the 19th most valued asset in the world.
Bitcoin is used by criminals for criminal activity
My response to this can look much the same as the first one. Most people who read this will conduct business in dollars, and, well, thank God criminal activity has never been associated with criminals or criminal activity.
The price of Bitcoin fluctuates too much for it to work well as a means of payment
Very true. I won’t try to argue that one. The reason that that doesn’t hold water is that, while it is a cryptocurrency, Bitcoin’s primary application isn’t to be used as money. It has value, so it can be used as money, but it’s primary application is that of an asset, a commodity. In 2015, The CFTC (Commodity Futures Exchange Commission) determined that Bitcoin and other cryptocurrencies are properly categorized as commodities, according to the CEA (Commodity Exchange Act).
So, buying bitcoin is less like buying a currency and more like investing in gold or silver. When you buy gold or silver, they have value, but you’re not going to use them to go out and buy a cup of coffee.
“I can’t afford to buy a bitcoin.”
You don’t have to have $17,000 to invest in Bitcoin. In fact, you can begin to invest with as little as $2.00. Literally, you can download the Coinbase app for free and begin investing with as little as $2.00. (While I have linked the website, I wouldn’t suggest using it. Computers aren’t as safe as cell phones, so I just use the app on my iPhone.)
Moderate investments suggested
I’m not writing with the expectation that someone will read this and dump a whole bunch of money into cryptocurrency; rather, I’m merely stating my belief that you, my friends, can place some money into Bitcoin–and other cryptocurrencies as you become more knowledgeable–leave it there, and it will grow over time.
I think this is especially valuable information for those of you who have children, those who are apt to be more long-term investors. I began investing in cryptocurrencies almost three years ago. I don’t put a lot of money into it–never invest anything you can’t afford to lose. I invest what I call “coffee money.”
I like coffee, but I don’t spend a lot of money at Starbucks or on gourmet coffees. In fact, I don’t overpay for anything, and I don’t spend money on things I don’t need. When I need a new phone, I get a new phone. When I need a new pair of shoes or some new pants, I buy them. I can’t recall the last time I spent money on myself for something I didn’t need.
So, I put my “coffee money” into investments. I have my Coinbase account set up so it takes a nominal amount out of my checking account–Coinbase’s security has never been breached, and they insure your investments against any error on their part–each week.
And I let it sit there and grow.
This post getting a little longer than I like, I’m not going to go into how my investments have fared right now. I’ll save that for next time. I think you can imagine that they’ve done well enough for me to post this.
But I will follow up on this in the next three or four days. In the meantime, you can hit me up with any questions you may have.
Until soon, my friends, I hope you’re well and happy.