Who would buy offline Bitcoin certificates?October 14th, 2016
Bitcoins emerged in 2009 and entered the fringes of mainstream media coverage in 2013 when the price for each Bitcoin rose 500% over the months of March and April of that year. Many reasons are cited for the rise, the most interesting of which is the Cyprus Banking Crisis which gave a gentle reminder, to anyone paying attention to the economy, that the financial crisis of 2008 is not really over.
Since that year, Bitcoins have come a long way, in price, adoption, regulation, and public perception. Yet many people still ask the question: who would buy Bitcoin certificates? At Bitcoin Global CapitalTM we believe that the answer is a simple one. Everyone who understands what Bitcoins are and especially, within that group, everyone who is interested in growing and preserving their wealth.
When it comes to growing your wealth, Bitcoins offer excellent potential because there is a limited supply which is coupled with rising demand. The limited supply is actually a very important component of the Bitcoin infrastructure. There will only ever be 21 million Bitcoins issued by the network. This has been programmed into the Bitcoin Algorithm and is a great example of creative computer programming, as is the whole Bitcoin concept itself. The amount of new Bitcoins being issued through the internet halves every 4 years, this event is known as the halving (the last halving occurred in July 2016). This happens every for years until all 21 million Bitcoins are issued. For practical purposes 2040 is the date by which all (99%) Bitcoins will have been issued. This essentially means that we have only 23 years of supply left, and when we factor in continued rising Bitcoin demand from first time buyers, all other things being equal, prices should rise. Anyone looking for capital growth could buy Bitcoin certificates as part of their diversification strategy and benefit from what seems like a logical capital growth investment.
When it comes to preserving your wealth, Bitcoins could potentially play an important role. To many observers, particularly the wealthy, the current financial system does not look healthy. Anyone taking a longer term view of the global economy will see that over the last several hundred years there have been many economic implosions as well as currency collapses. Our current, central bank issued, fiat monetary system is untested and volatile, as evidenced by the recent, unfinished financial crisis. There are trillions of dollars of toxic debt lurking in hidden balance sheets and terrifyingly large derivative write downs looming. Historically it has been said that most currencies only last an average of 70 years. Against this backdrop can anyone afford not to look at Bitcoins as a safe haven and store of value? Even if a major economic catastrophe does not occur in the coming years or decades, there is clear evidence of currency depreciation in many parts of the world, from Argentina and South Africa to China and even the United Kingdom. High profile economic commentators have also warned of further risks ranging from bank failures, bank ‘bail-ins”, government wealth confiscation, hyperinflation, capital control restrictions and currency wars. In the world of 2016, with technology at out fingertips, everyone interested in preserving wealth might do well to consider diversifying into Bitcoins, an asset which is outside of the banking system, and an asset which is expected to appreciate in value. Moving a proportion of one’s wealth onto Bitcoin certificates could protect that wealth from slowly losing purchasing power at best, or vanishing overnight at the worst.