Bitcoin Market Cap in USD = $350,051,273,940 (coinmarketcap.com)
Greetings and Salutations,
Bitcoin’s price and popularity seem to be positively correlated. I have no fancy graphs or large data sets for such a claim. All I have is a bunch of text messages and comments from the people in my life. As the price skyrockets, so does social and consumer interest. My friends only ever text me when the BTC price is approaching monthly or yearly highs.
“Is now a good time to buy BTC?” They ask after a 33% weekly uptick.
“Probably not right this second. Why didn’t you buy it when I told you about 78% ago?” I ask.
I find this qualitative trend quite frustrating. It’s almost like people are more comfortable with a prohibitively expensive asset because that seems normal, because that is how the world has always worked. BTC under 10k is volatile and scary. BTC at 20k is promising and secure (even though it has been swinging 5% seemingly every day for the past two weeks).
There is probably some psychological tick that explains this phenomenon. I think of it much like designer brands or upscale grocery stores. Consumers feel better about purchasing an item that is more expensive because a higher price should mean better quality. However, a lot of the times that package of fruit cups at Trader Joes for $6.50 is the same exact one at HEB for $3.25.
Maybe that is why people wait to get interested in BTC at higher prices. They assume better quality goes with higher prices. There might be something to that logic (ok, there is definitely something to that logic… but if you wait for BTC’s price to get higher and higher, at some point it is going to outgrow the price discovery phase and the potential for huge gains will be greatly diminished).
It’s quite the Catch-22. Wait for BTC to stabilize and your potential for profit decreases. Buy in at the current high price and your potential to lose everything increases. Wait until the next dip to buy… and maybe that dip never comes … or maybe the dip comes and it scares you away.
Bitcoin is anti-intuitive like that. Understanding Bitcoin is less about understanding Bitcoin than unlearning years of financial bias. BTC is an asset that has the same characteristics of money (gold/cash/shells/stocks/etc). However, the way BTC uses these characteristics is drastically different (check out some of my older articles if this sentence seems too vague).
Soooooo, here is my bold claim for this morning.
When I get a text from a friend or family member or random member of the Twitter-sphere asking about the timing of their BTC purchase I am going to tell them to buy $100 worth.
Just to get some skin in the game, no matter where the price is at the moment. Get them comfortable using the exchanges and checking the price every day. Then maybe add a $100 to their investment the next time they see a dip.
It’s funny how much better I started to understand BTC once I put a little bit of money in. I think I have done a disservice to my friends to understand BTC and THEN purchase BTC. They can figure out for themselves whether or not BTC is a game changer.
Crypto Recommendation of the Day:
Buy a ledger wallet. It makes you feel badass and like you really know what you are doing, plus it is a much safer way to store your BTC than on an exchange.
Crypto News:
- https://www.forbes.com/sites/michaeldelcastillo/2020/12/02/visa-partners-with-ethereum-digital-dollar-startup-that-raised-271-million/?sh=618e01c34b1f
- Check out this article about Visa and Circle’s partnership to bring blockchain to the U.S. dollar. Fair warning, it is kind of confusing.
- ETH 2.0 successfully launched the Beacon Chain yesterday.
- Coindesk reported an all time high for “active entities,” aka BTC wallets, yesterday. That means more people are using BTC. Woot Woot.
Tweet of the Day:
“Bitcoin will reward you if you understand it.” – Pierre Rochard, the King of Maximialists.
Hope y’all have a fantastic day,
-Kram
KRAM 