There has been much talk comparing the invention of Bitcoin and blockchain technology with the invention of the internet in terms of its capacity to change the world. But will Bitcoin go the distance and revolutionise the financial system by providing an enduring and credible alternative to fiat currency? The question on everyone's minds is 'Should I invest in Bitcoin?'
We, like everyone else, don’t own a crystal ball. But we’re the types who put our money where our mouths are and are optimistic about the future of Bitcoins price. Timeframes and entry prices are anyone’s guess, but we’ll continue to invest in cryptocurrencies for the foreseeable future.
As old financial markets guys, let’s take a look at the charts.
Too early to tell if the charts will look similar in 20 years of course, but what we know about the recent accelerated up move in Bitcoin BTC is that it was driven by speculative fervour.
It’s probable that much of the hot money that piled in above $15,000 has either already puked or will soon enough if the price keeps heading lower.
To make real money buying and holding Bitcoin will take little more than patience, something that few punters have got.
For those familiar with Bitcoin and the volatility around the price of Bitcoin, you will know all too well that you must be in this for the long haul.
Herein lies the distinction, bitcoin investing vs bitcoin trading.
Whichever way you slice it, Bitcoin is too slow and expensive to be a transacting currency for small purchases off-line.
If you want to buy a cup of coffee with Bitcoin, sometimes it’s okay if you’re not in a rush.
It might cost you $0.03 cents in transaction fees, and only take 10 minutes to confirm on the network.
Enough time for your coffee to go cold, but hey, you can still do it.
There are a number of alternatives in development which are aimed at solving this problem. This also means there will always be more investment ideas you can consider.
The lightening network is one such solution, which allows two parties to transact instantaneously at low cost, without the need for a trusted intermediary.
Bitcoin is still great for transacting online where the speed of payment is of less importance than costs and security.
But don’t get caught up in this argument if you’re wondering whether Bitcoin or other crypto currencies will go up in value over time.
Firstly, Bitcoin is great for large transfers of capital cross-border.
It’s much cheaper and easier than dealing with banks. Recently, a large owner of Bitcoin transferred 48,000 Bitcoin in one transaction for a transfer cost of $0.04.
That’s a US$290m transfer for $0.04. Should we say that again?
Banks should be trembling in their boots. These types of impressive transactions are making people question whether investing in banks in the stock market are worthwhile as the technology and blockchain continue to grow.
No longer is there a need for trusted third parties to sit in the middle of a transaction clipping the ticket.
Secondly, Bitcoin is scarce in its design.
It’s why they call it digital gold. Only 21 million Bitcoin. Ever.
Wait until Japan or Europe or the USA experience a meaningful inflation again, then you’ll know why.
Click play on the video below to see how Bitcoin is working well as an inflation hedge in Venezuela.
Remember, inflation is not the cost of goods, services and assets within a country going up. It’s the value of the currency, that these goods, services and assets are priced in, going down.
Let’s look at a recent example of Venezuela’s inflation. Only 40,000% per annum.
What does a rapidly rising inflation rate mean in the real world?
As a back of an envelope calculation, for example, it’s a loaf of bread which cost $5 this time last year is costing $2,000 today.
How much Venezuelan currency is being printed to cater for this demand for currency do you think? Think confetti.
You may remember Zimbabwe's out of control inflation levels. They were issuing notes worth $100 billion as per the image on the right.
And yes, that is $500 billion Zimbabwe dollars right there.
Bitcoin is limited in its supply by design. As a result, tens of thousands of people and organisations have chosen to invest in Bitcoin mining.
They have focused their time and energy building their mining equipment in countries with cold climates.
Fiat currency, on the other hand, the stuff that Central banks have been printing with reckless abandon since 1971 (and in overdrive since 2009), is not.
When inflation returns in earnest, people will be exchanging their rapidly depreciating fiat currencies for digital gold like their lives depend on it.
Because at $2,000 per loaf of bread, it will. Back to the Zimbabwe dollars example, you could buy 3 eggs for $100 billion back then.
So, is it too late to invest in Bitcoin or the other top cryptocurrencies or alternative cryptos? Is should you wait until you can invest in a Bitcoin ETF?
Is now the time to buy Bitcoin? No idea. That depends entirely on your personal circumstances and personal finance goals. Is it better than real estate? Again, depends on your investment timeframe.
Is it better to buy Bitcoins or hold cash in a bank account? We discussed this in a recent blog post here.
But we own it and despite the recent sell-off, we’re taking our advice from The Clash*.
Should I stay or should I go now?
If I go, there will be trouble
And if I stay it will be double.
*If you’re old like us, you’ll know what we’re on about. If you don’t know, then you’re young and will know how to find out (or you could just watch the video).
Avoid the Hidden Costs of Transacting in Bitcoin. Our goal is to help you pay low fees no matter if you are transacting in Bitcoin, Bitcoin Cash, Ethereum, Monero or any other digital assets.
Other helpful links:
Disclaimer: This post is general information only and in no way provides advice. Digital Currency Markets Pty Ltd and its employees and officers cannot be held responsible for any loss, cost or expense resulting from your activities related to the subject matter in this document and or relating to https://digitalcurrencymarkets.com/.
Most people involved in the cryptocurrency space who aren’t motivated purely by monetary gain will likely find themselves at some point saying something like this: “One thing I really like about cryptocurrency is that it’s decentralised, and that the currency isn’t owned or controlled by a bank or state.”
With all that in mind, this article will teach you to understand the key differences, successes, and failings of both centralised and decentralised crypto exchanges.
What is a Bitcoin Gift Card?
A Bitcoin Gift Card is the perfect way for the newcomer to get their first Bitcoin. It comes with a paper wallet and simple instructions to set up a software wallet so that you can transact with Bitcoin over the internet. Bitcoin Gift Cards are available in AU$25, $50, $100 and $500 denominations.
Who should buy a Bitcoin Gift Card?
Anyone new to Bitcoin will find no easier way to get their first Bitcoin.
They can be gifted by an existing cryptocurrency enthusiast, or bought by anyone wanting to get involved for the first time themselves.
How can I pay for my Bitcoin Gift Card?
You can pay with either cryptocurrency through our coinpayments.net payment gateway, or you can use Australian Dollars through our POLI Pay facility.
Can I use a Bitcoin Gift Card to top up an existing software wallet?
Yes. When you receive your additional Bitcoin Gift Card, you can simply import the "Secret" wallet identifier from your Bitcoin Gift Card into your existing software wallet. This will move your Bitcoin from your Bitcoin Gift Card into your existing software wallet.
What does my Bitcoin Gift Card include?
Your Bitcoin Deposit, wallet and key generation and network transfer.
How long does it take to receive my Bitcoin Gift Card?
Going through to checkout takes about 2 minutes. You won't find an easier process anywhere. Once you've placed your order, it can take between 10 and 60 minutes to receive your Bitcoin Gift Card depending on the speed of the Bitcoin network at time of purchase.
We have partnered with GiftPay, an aggregator of online deliverable eGift Cards in Australia.
Through our agreement with GiftPay, you are able to purchase a Flexi eGift Card from us, redeemable at a broad range of retailers in Australia.
Watch the Video to see how it works
What is a Flexi eGift Card?
A Flexi eGift Card is an electronic gift card that lets you choose where you'd like to shop! In the past if you were given a gift card for a particular shop but didn't want to buy anything from that shop, you were stuck. But now with a Flexi eGift Card, you get to choose at which shop you spend your gift.
What's more, you may be able to split your Flexi eGift Card and spend it at different shops! For example, if you have a $30 Flexi eGift Card, you could choose to split it up into a $20 Myer eGift Card and a $10 iTunes eGift Card.
Where can I spend it?
You can spend your eGift Card at a broad range of Australian retailers. For a full list of our retailers, click here. (page showing full list of retailer logos)
How do I redeem it?
Your Flexi eGift Card will be emailed to you. Click the link in the email to open your Flexi eGift Card.
Then convert your Flexi eGift Card into any combination of gift cards or vouchers up to the total available balance. How you redeem your chosen gift card depends on the card or voucher chosen.
What Bills can I pay?
You can pay any bill that has the BPAY logo and Biller Code including credit cards.
Are there any payment limits?
Yes. You can pay a maximum of $1000 per transaction based on regulatory limits. You can however break up a bill into multiple $1000 tranches and enter the same biller and customer reference code.
How does the transaction work?
When you enter the amount you wish to pay, the BPAY biller code and your bill’s customer reference number, you will click through to our checkout.
At checkout, you will be asked to leave your details, which enables us to satisfy our legal requirements under the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2017. This sounds ominous, but takes about 2 minutes.
When you proceed to payment, you will be shown the digital currency amount payable and the wallet address to send your digital currency to.
Once you have sent your digital currency to our payment gateway wallet, you will receive an email notifying you that your payment has been received. We then convert your digital currency to AUD and pay your BPAY bill on your behalf.
Are there any fees?
Yes. At checkout you will notice our 3% fee added to your bill amount. This is to help us manage the currency risk of a volatile digital currency market when converting to AUD for us to pay your bill. We use a third party payment gateway to enable the digital currency transaction. Our considerations when choosing a gateway was security, pricing (spread) and speed. You’ll note when at checkout (before proceeding to payment) that the price you receive on your digital currency is very competitive. Other digital currency BPAY facilitators charge up to 6% per transaction on the currency alone, which in our view is akin to highway robbery.
[Free PDF Download] 5 Costly Mistakes When Transacting in Crypto Cheat Sheet
Enter your details to access your cheat sheet.