Hi Hands

The Bitcoin price is at a polarizing position at the moment - many observers feel that the $41.7k USD level that we've bounced off twice now will hold, whilst many others see a continued fall, possibly even to $35k or $32k.

Personally I feel that the price has a bit further to fall and therefore probably recommend a bit more patience.

Cheers

@Dangles

Thanks for the reply. Good to hear bear/bull cases.

I'm just wondering how pervasive Bitcoin is as a currency. What can actually be bought with Bitcoin?

• The best use case I can come up with is "medium of wealth transfer" (eg In El Salvador citizens are receiving money from richer USA relatives as they wire money back to their homeland without the transaction fees where Bitcoin is legal tender I believe)
• I suppose we are just waiting for the digital wallet tech to get better before we can buy goods seamlessly like with a credit card? But until then it remains an investment?

I strongly believe in digital currency. I'm just trying to gage the tipping point where it will become the norm. A bit like BNPL.

Rightly or wrongly, I think it depends on what the price of Bitcoin does from here. From inception, the CRYPTO ETF is down 38%, while Bitcoin is down 30% over the same time period. Looking at the top ten holdings of the ETF:

COINBASE GLOBAL INC         11.1%

SILVERGATE CAPITAL CORP 9.8%

MICROSTRATEGY INC           9.7%

MARATHON DIGITAL HOLDINGS INC 8.2%

RIOT BLOCKCHAIN INC          7%

GALAXY DIGITAL HOLDINGS LTD      5.1%

VOYAGER DIGITAL LTD          4.8%

BAKKT HOLDINGS INC           3.5%

HUT 8 MINING CORP  3%

NORTHERN DATA AG 2.9%

The companies whose earnings directly correlate to the Bitcoin price, e.g. Microstrategy and the BTC miners, makes up 28% of the funds holdings. In times of crypto volatility, the other exchange companies such as Coinbase and Voyager may actually increase revenues. E.g. Voyager recently doubled their revenue in a single quarter!! https://www.coindesk.com/business/2022/01/05/voyager-digitals-estimated-quarterly-revenue-doubles-to-165m/ but that probably won't matter until the doom and gloom headlines about BTC price pass..

Transactions are seamless already with a lightning wallet. The issue is outside of El Salvador spending is a taxable event so currently it is a savings technology. New use cases come and go some are more promising than others. The main problem currently that Bitcoin solves is hopefully preserving wealth in a negative real rate environment (digital gold).

Although if you tune out the noise of price headlines...

In the last twelve months:

• Adopted by small country as legal tender
• Implemented into twitter for tipping
• 40% of hash rate migrated from China after ban with no down time of network
• Tesla invested 1.5 billion, Mastercard, BNY Mellon, Twitter, square and micro strategy also added Bitcoin to its company reserves
• At least 12 mining companies raised between $50 million to $650 million each
• Several banks in the US started accepting Bitcoin
• Very friendly regulator talk / senate hearing out of the US

Similar events occurring are likely to accelerate as adoption continues at an exponential rate.

The use cases of Bitcoin and Crypto Digital Currencies are varied and change constantly.

Bitcoin as a medium of wealth transfer is an appealing use case, as it undoubtedly offers lower fees than Western Union or other similar payment processors that prey on unbanked consumers from lower socio-economic nations. Use as a real world currency is currently limited however due to volatility. Bitcoin volatility has been trending downwards over time, but is still much too high to be used as a stable currency for everyday goods purchases. Nonetheless, there are many providers that now allow you to pay for everyday goods with a bitcoin denominated debit card, but consumer demand has been quite low due to the volatility issue.

More recently, the use case of Bitcoin that has gained the most popularity is as a digital 'store of wealth' or as a 'digital gold'. As Bitcoin has a defined supply that will never change, many see it as an effective modern hedge against inflation in much the same way people rush to gold when volatility hits.

Waiting for a 'tipping point' per se with digital currencies doesn't make a lot of sense to me. If you believe in the technology and can foresee a world where cryptocurrencies become an entrenched part of the modern financial system over the next 10 years, then the current price is less significant. In that position, I believe the best tactic would be to invest using Dollar-Cost Averaging method.

@AlphaAngle

Nice analogy "digital gold". Lots of investors, lots of markets to trade this commodity. Productive asset when it is used as 'fee saver' tech.

Wondering how the regulators are going to rein this in to get taxes for social investments. How would nations (eg El Salvador) support their public services if they use bitcoin as legal tender?

Note to myself and others who are not up with the lingo.... "Mining hashrate is a key security metric. The more hashing (computing) power in the network, the greater its security and its overall resistance to attack."

@Dangles

Accept your point about not trying to time the market with digital currencies. But I'm thinking opportunity cost in investing in this space, like waiting for a small biotech company to develop it's use case and go into production. High volatility obviously also adds to the risk.

I'm already in CRYP etf. Just trying to determine if I want to hold more.

Interesting that Bitcoin supply is limited to 21 million. (Thanks for pointing that out Dangles.)

Whereas Ethereum adds new assets regularly.

Two very different beasts!

I believe it was ~$11.19 not 100% but very very close to it.

Yes, that was the initial opening price approx.

Was the application/subscription price much different to that? I forgot to fill in my form so I never got the offer paperwork, now I'm curious.