Bitcoin has been making new all-time highs lately. Today it surpassed 29,000. As a Bitcoin investor it is easy to feel a sense of validation and euphoria watching it rise, but nothing lasts forever. I expect there will be some volatility ahead, but that most likely will not deter me from investing further.
Except for some lagging doomsayers, the general consensus is that the outlook for Bitcoin is bright. The most recent supposed cloud on the horizon is the possibility that the government may place some new restrictions on the trading of bitcoin., requiring greater transparency for transactions conducted. The doomsayers were trying to contend that this would be terrible for Bitcoin, but in actuality, most small investors in Bitcoin, like me, already trade with complete transparency, just as we would in any other security. So I don’t see this as being a major hurdle for continued advancement.
The upside looks bright because of the increase in institutional acceptance of Bitcoin. The first such signal was when Paypal started accumulating it and allowed transactions to be conducted using it. But more importantly, we now see major asset managers placing some of their funds in Bitcoin. These are not short term small investors. These are experienced, educated people who have done extensive analysis and seen the profitable future.
I saw an interview recently on Bloomberg TV when an asset manager predicted a price of 400,000 for Bitcoin. He didn’t give a time frame for that target but he is basing it on the probability of Bitcoin becoming a safe haven asset, just as gold and silver are now. While fiat currencies like the US dollar continue to decline in value as a result of the massive influx of new money through fiscal stimulus, Bitcoin is not subject to such depreciation because it’s supply is fixed and limited.
It is not a sovereign currency and there are no hard assets backing it, but Bitcoin is still something you should consider investing a little bit at a time. If that 400,000 price target is met in even a 5 year time span, the likelihood is that you will outperform more tangible assets by a country mile.