Is Bitcoin a worthy asset for investing? In 2017, Bitcoin had the highest yearly returns of all publicly available equity assets at 1318% 🤯. That’s enough to at least make me consider learning more about cryptocurrency. So what is Bitcoin? It is the granddaddy crypto-coin that allows easy global transfer of value without the use of financial institutions or governments. Typically, the creation and transfer of money is tightly controlled by the country’s government, who ensure that folks abide by financial regulations but also manipulate the value of their country’s currency. Bitcoin offers a way to send “money” to anyone in the world without dealing with exchange rates or paying middlemen. Bitcoin is rising in popularity and utility globally in places like Nigeria, which has a high number of unbanked citizens. Because of this, Bitcoin is very volatile (read risky). Bitcoin’s yearly return in 2018 was -72%, while its 2019 return was 87%. This year, Bitcoin is up more than 300% from March lows. 

Some folks argue that Bitcoin does not inherently hold any value like a stock or real estate does so is worthless. Others counter that Bitcoin is like digital gold - it is a hedge against the stock market and tends to rise in value when the stock markets tank. The number of people and institutions with access to Bitcoin is rising as it gets easier to buy and sell crypto through popular services like Robinhood and Paypal. The more people use Bitcoin, the more its value rises, potentially setting up a nice profitable trade opportunity. JP Morgan recently reported that folks are moving their money from gold to Bitcoin, as Bitcoin gets adopted by institutional investors, which has only just begun. Bitcoin is also becoming increasingly scarce, as the finite 21 million supply gets mined. Currently, there are close to 2 million Bitcoins outside of circulation. As the supply remaining dwindles, its value will increase (supply, meet demand 🤝, flashback to Economics 101). Bitcoin is on an upwards tear right now and it is poised for short-term correction, potentially providing an opportunity to start a position. Bitcoin is a speculative asset, since it is a relatively new asset that we are unsure how to value. A small position in Bitcoin sounds appropriate, but be prepared to hold for at least 5 years and to lose it completely. Remember we invest for the long-term!Â