Bitcoin continues to rise in the face of all challenges: Contentious hard forks, government intervention, mindless attacks… and stagnant transaction volume. I don’t hear many people talk about this – the fact that the rolling daily transaction volume for Bitcoin hasn’t done diddly squat over the past year, yet price has gone up 900%.
If there is ONE fundamental metric we can all agree upon for Bitcoin, it is the number of transactions completed using the cryptocurrency. Yet we remain at approximately 250 – 350k transactions a day, while Paypal averaged approximately 21 million transactions a day in Q3’17. It’s even worse when you consider the fact that transactions between exchanges (not inside) are included, which I don’t really consider “adoption.”
Yet despite this, Bitcoin continues to skyrocket. The best argument out there is that Bitcoin is stealing part of gold’s market share as a store of value, and given that gold is over a T market, Bitcoin is still peanuts compared to the size it could grow to. However, when I hear most people talk about Bitcoin, they talk about how it will replace governments, take over banks and revolution P2P transactions – all of which require a SUBSTANTIAL increase in transaction volume.
I argue Bitcoin continues to rise for these reasons:
1) FOMO Investing
2) Incremental Value created by news event due to inability or lack of skill for finding a fair value for Bitcoin to converge to by most market participants
3) Price Memory
4) Increased market share for “store of value”
What are your thoughts? I’d love to hear them in the comments.
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My Recommended Hardware Wallets:
If you want to store your cryptocurrencies safely, the best way is through a hardware wallet. Seriously – look it up and you’ll find plenty of information supporting this claim. There are alternatives such as paper wallets, but these are convenient and my choice for cold storage (offline):
Ledger Nano S:
Ledger Blue (expensive):
I personally prefer the Ledger Nano S, but the Trezor is such a close second that it really doesn’t matter which one you go with. Ledger Blue is premium and convenient, but not necessary.
My Favorite Book for Investing in Crypto:
This book is, bar none, my favorite book for investing in cryptocurrencies. It doesn’t bog you down with technical jargon, but instead focuses on all the elements you should understand before you invest.
It’s a comprehensive book for both beginners and experts. Beginners will find information about major cryptocurrencies (not just Bitcoin) as well as details on historical market events (that you can draw on for future) and events to watch for moving into the future. Experts will find the chapters on valuation particularly useful. For those of you involved in traditional investing, this book is even more of a godsend as finance info is explored (correlations with other asset classes, ETFs, etc).
My Recommended Exchanges: Coinbase / GDAX / Bittrex
If you sign up to Coinbase using link above, you and I will both receive each after you buy your first 0 of Bitcoin using Coinbase. Coinbase is much less intimidating for beginners. Once ready, move up to GDAX for cheaper or zero fees. For altcoins, I recommend Bittrex.
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None of what I provide in my videos is investment advice. Please do your own due diligence.