My first article on this website was over 5 years ago, Inflation Destroys Dollars. I certainly did not have any idea that the price inflation would be triggered by the government’s response to the COVID-19 pandemic. I certainly didn’t anticipate the lockdowns and supply chain disruptions back in 2016.
I know the fiscal and monetary policy pursued by the United States and virtually all the world: money printing, onerous regulations, taxes and spending, would eventually result in significant price inflation. Government response to COVID-19 has made the situation worse and pulled the day of reckoning forward but it certainly isn’t the largest factor.
Timing is always a challenge and I was quite early.
Price inflation is here and it is happening fast enough where people notice it and are actually talking about it. Depending on who you trust and how you measure it, prices are rising at a rate of 6-10% per year now. I think what is interesting is that the government’s own numbers (the CPI-U) shows inflation at 6%. This is far beyond the 2% the Federal Reserve has been calling for.
In Inflation Destroys Dollars I write about how gold and silver are an inflation hedge. On 16 May 2016 when I wrote that article, gold was trading at $1,252 per ounce. As I write this it is currently up to $1,864.61, an increase of 48.9%. That is an annualized return of roughly 7.5%.
On 16 May 2016 Silver was trading at $17.14. It is now trading at $25.29. That is a 47.5% increase for an annualized return of approximately 7.3%.
So, if you think that inflation has been somewhere between 4% and 8% over the past five and a half year, gold and silver have on just kept up with inflation during this timeframe. Not bad but also not great. Gold and silver remain the boring reliable hedge and that is a good thing.
Value Stocks as an Inflation Hedge
Value stocks are another asset class I mentioned in Inflation Destroys Dollars. I didn’t mention specific funds. I have made some of my own individual value stock picks with some fantastic picks, but also some not so good picks.
Vanguard’s Selected Value fund (VASVX) is a mid-cap fund that could serve as a proxy for “value stocks”. It was trading at $26.41 on 16 May 2016. It is currently at $33.39. This is a return of 26.4% and an annualized return of 4.3%. Not stellar as I would not say this has kept up with inflation.
The Vanguard Value Index is a large cap value fund (VVIAX). It started this period at $32.49 and is up to $56.68. This is a return of about 74.5% and an annualized return of 10.65%.
A final example to look at, Vanguard’s Mid-Cap Index Admiral Shares Fund (VIMAX) started in this timeframe at $150.33 and is now at $320.62. That is a total percent return of 113% and an annualized return of 14.7%. Much better.
Compare those to the Vanguard 500 (VFIAX), which started this timeframe at $184.53 and is now at $432.9. The total return of this fund was 134.6% an an annualized return of 16.77%.
So while value stock fund did beat the rate of inflation and are a good hedge, they didn’t outperform your vanilla S&P 500 index fund.
Bitcoin as an Inflation Hedge
Compared to gold and silver, Cryptocurrencies, particularly Bitcoin has had all the action.
On 16 May of 2016 a Bitcoin was trading at about $454. Today Bitcoin is trading at $64,346. That is an astounding increase of 14,073% or an annualized return of about 146%.
Clearly Bitcoin has outperformed Stocks, Gold and Silver during this timeframe in an astounding way.
I own Bitcoin and I’m not anti-bitcoin. But I’m also not a Bitcoin maximalist. I think it is possible and perhaps even likely that Bitcoin will be replaced with a superior cryptocurrency that has some combination of faster transactions, higher transaction throughput, anonymity and or additional features. In my view Bitcoin in its current state is too slow and transactions are too costly for it to work as a medium of exchange for day to day transactions. These views are very unpopular with Bitcoin maximalists that ignore or downplay Bitcoin’s weaknesses.
However, Bitcoin has provided an incredible return and far outpaces inflation.
The 14,073% return is not just a result of inflation, although it is increasingly being viewed as a safe haven alternative investment.
Bitcoin has had several great tailwinds 1) It is an emergent asset class 2) It is trendy and popular and gets media attention 3) It is viewed as a Federal Reserve / dollar debasement hedge in place of gold.
Inflation Hedges
Protecting one’s wealth and purchasing power from inflation is important. Just keeping up with inflation is not ideal either, if the assets are not tax advantages, the government will tax the “gains”, and so purchasing power is eroded.
Let’s look at a simplified example. Say you frequently buy a widget or pay a service that costs $100 per year. Say the price goes up 5% per year due to monetary inflation. You also have a $100 investment that also goes up 5% per year. You’re still not keeping up with inflation because of taxes. If your $100 investment goes up 5% to $105, the government is going to want some taxes on that $5 gain. Say you’re on the hook for 15% capital gains taxes, the government is going to take their share and leave you with a $4.25 gain.
So you now have to come up with another $0.75 to pay for the item or service. Scale this up to include all of your expenses for the year and you see that you need to not only keep up with inflation, but exceed inflation so you have the money to pay the taxes on the gains.
In order to keep up with inflation your investment would need to be in a tax advantaged account that would lower or eliminate the tax burden owed or (again assuming a 15% gains tax) you’d need the investment to go up by about 5.9%.
This also shows how insidious inflation is. Not only is money worth less, but the government taxes the gains, even if there was no gain in terms of purchasing power.
One other thing to keep in mind, in the United States at least, realized gold and silver gains are taxed at the generally higher income tax rate rather than capital gains tax rate.
Are Gold and Silver Great Inflation Hedges Anymore
Gold and silver might not be very good inflation hedges anymore. If I owned gold or silver I wouldn’t sell unless I needed to rebalance my portfolio. I would expect these assets to at least keep pace with inflation, but unless the demand for gold and silver increases in excess of new supply, I don’t think gold and silver will beat inflation in the way needed in order to truly hedge for inflation when accounting for taxes. While it has produced a positive return in excess of inflation, it certainly hasn’t been a fantastic play over the last five and half years since I started HowIGrowMyWealth.com.
Gold isn’t supposed to tarnish but it has certainly lost its luster in my eyes so far in 2021. I have determined that for me, having 10-20% of my liquid net worth in precious metals makes sense as a protection against dollar debasement. Right now we’re in the kind of environment in which I would expect gold to shine (that should be it for the gold puns in this article.).
However, gold has not fared well so far in 2021.
What kind of environment am I writing about? Rising interest rates and helicopter money. Interest rates, while still historically low, have been rising. There has also been “helicopter” money where the treasury is directly sending people checks.
The Economic Environment
The latest round of these “stimmy bucks” should be coming soon, as President Biden is expected to sign a $1.9 trillion bill, which among many other things includes a $360 billion bailout of state, local and territorial governments and $1,400 check to anyone making $75,000 or less.
The blue team currently controls taxes and spending in the United States. While the reds are spendthrifts in their own right, and these stimmy checks were initiated under Trump, the blue team is worse. I’m not aware of a party which practices fiscal discipline in the United States. I expect this to be the first of many trillion dollar spending bills passed during the Harris-Biden Administration.
I understand that if the government is going to make it illegal for a lot of people to work and a lot of business to operate that creates problems, such as unemployment, less available goods and services and a lack of economic resources for individuals and families struggling to make ends meet. So this spending bill is no doubt an attempt to try to fix the some of the problems created by the lockdowns.
Whether these lockdowns were necessary to prevent people from dying from the Wuhan Coronavirus frequently referred to as COVID-19 should be debatable. However, thanks to censorship we all just have to click our heals and accept that without lockdowns the bodies would have piled up in the streets, hospitals would be overwhelmed and furthermore, that the increase in deaths due to undiagnosed cancer, suicide, etc., simply don’t exist or don’t matter. But I digress.
In an environment in which it has been illegal for people to show up to work to produce goods and services, and which the government is sending people checks, you expect rising prices. Prices have been rising. We’ll ignore the CPI, which seems to be designed to not measure rising prices. Lumber is up, oil is up, many commodities are up.
Gold is Not Rising
Even though many commodities are up, gold and silver are not up. Why is that?
Gold Price Action over the last Ten Years
After making new highs in the wake of the 2008-2009 financial crisis, Gold had been in a bear market from September 2012 through November 2015, where it made a low of $1,045. It pretty much traded sideways and slightly up for the next four years, until 2019, when gold rocketed up, finally making that new high in August of 2020, reaching $2,089 per ounce. It then proceeded to sell off and is currently trading around $1,721. I think $1,800 was an important price level, but the yellow metal zipped right through it.
There does seem to be some support around $1,700 but it doesn’t look super strong. I’m definitely biased to the upside, but my guess is gold bounces between $1,700-$1,800 unless and until the Fed does something to manipulate interest rates back down. Why would the Fed do that? An economic recession or a stock market selloff.
In February of 2020, the S&P 500 was trading around $3,350 or so. This was before the lockdowns and the panic. Now, after having shut down a lot of the global economy, after unemployment going upwards, the stock market has recovered, but are things better than they were in February of 2020? The stock market thinks so. The S&P 500 has made a new high of roughly $3,950.
I would think that if interest rates continue to rise there will be a significant correction in the stock market. The Fed would then step in and do what it can to lower interest rates back down which would prop up stocks. So far the market had shrugged off rising rates, however.
Why Hasn’t Gold Performed?
There are three main reasons. Reason #1 why gold hasn’t performed: rising interest rates. If bonds are yielding nothing, then it is easier for gold (which also yields nothing) to compete.
This is supported by the chart below. The 10 year treasury yield is in blue. You can see in late July, the yield on the 10 year bottomed and then started rising. At that same time gold peaked and then began to sell off. That inverse correlation looks very tight to me.
Gold has been a safe haven alternative to bonds in a low interest rate environment. Now that there is some yield to be had with treasuries, perhaps gold investors are concerned that zero yield gold will be replaced paltry (but at least nominally positive) yielding US debt.
Reason #2, which is conjecture on my part, is the stock market continues to rise. If there is real economic growth I would expect stocks to outperform gold long term. Gold is a safe haven asset outside the banking system. It does well when there is economic uncertainty, when a currency is in doubt.
Stocks have not sold off despite rising interest rates. As a result there isn’t a pressing need for a safe haven asset and money flows out of it. There was some volatility in the fall of 2020, but for the most part stocks have continued to go upwards. So while rising rates seems to have scared gold investors, it doesn’t seem to have impacted equity investors much.
Reason #3 is cryptocurrencies, specifically Bitcoin, which currently has over a 61% dominance in the cryptocurrency space. Some corporations are now deciding to put some of their money into BTC, and this institutional investment is doubtlessly driving the price up, and some people who are concerned about dollar debasement are probably deciding to go with so-called “digital gold” rather than real gold. You know it is bad when Peter Schiff’s son is liquidating his silver stocks and going 100% into Bitcoin.
From a transactional perspective it is less expensive to buy Bitcoin through an exchange like Coinbase, than it is to buy and ship gold from a bullion dealer. Some people are doubtlessly taking their stimulus checks and using it to buy Bitcoin.
Bitcoin Over Gold?
I won’t bother charting gold next to Bitcoin because Bitcoin has gone up so much that you would hardly even see gold on the chart.
I’ve never had enough confidence in Bitcoin to put a lot of money into it, and as a result have missed out on a lot of gains. The first mover advantage and name recognition seem to be enough to carry Bitcoin despite the existence of other coins that have superior characteristics, such as anonymity, higher and faster transaction throughput and lower transaction costs.
I’ve bought and sold Bitcoin over the years dating back to 2011 or 2012 and I still own some Bitcoin and EOS. Of course if I knew the price of BTC in 2021 was approaching $60,000 I would have bought and held onto more.
Despite the continued price rise to the moon and beyond, I personally have a lot more confidence that gold will be worth something 20 years as compared to Bitcoin which I have less confidence will be worth anything 20 years from now.
The two mains risks to Bitcoin are 1) The widespread adoption of a better alternative to Bitcoin 2) Interference from the Chinese Communist Party.
But, as I’ve written about countless times before, you can own both, it doesn’t have to be either or.
In the meantime I’ll continue to hold onto my gold and silver as a part of my overall asset allocation.
Some people who are anti-bitcoin will argue that the government will shut down bitcoin. Other pro-Bitcoin folks argue that is impossible. Of course these arguments could (and have been) made in a more subtle fashion, but those are the two camps when painted in broad strokes.
Governments Could Pass Legislation Making Bitcoin Illegal
The governments could easily pass legislation to make owning and mining Bitcoin illegal.
The US government has made basic things like alcohol and gold illegal in the past. Drugs like marijuana are still illegal at the Federal level in the US. So the US government has made various things it doesn’t like illegal in the past.
Making highly demanded products illegal doesn’t eliminate them. The black market steps in to supply the demand.
The war on drugs has been a colossal failure. Despite being illegal people with the limited resources and influence of your average high school student can still get marijuana. People in prison can and do still get illegal drugs. If the government can’t keep drugs out of prisons they will never keep them out of the country.
Even the most ardent statist would probably admit that alcohol prohibition was unsuccessful.
I’m not actually certain how successful the banning of gold was as a result of President FDR’s tyrannical Executive Order 6102, which attempted “Forbidding the Hoarding of Gold Coin, Gold Bullion and Gold Certificates”. It would be hard to judge because it would require people coming forward and admitting they violated an executive order for over 35 years. But I suspect there was significant non-compliance.
So prohibition of various things hasn’t worked well in the past. As long as there is demand for something a certain percentage of people who demand it will find a way to get it.
Despite the questionable efficacy of legislation governments certainly could make Bitcoin illegal. But would they?
The US Government will go after BTC if it is deemed a threat to the Dollar
The United States government could certainly pass legislation to make Bitcoin illegal. But I think they would only do this if BTC was viewed as a serious threat to the dollar.
The US government has (according to some) invaded countries and destroyed them for planning go off the petro-dollar and adopt a gold backed currency.
The ability of the US government to borrow in dollars and then create new deposits with which to pay back those dollars is a huge benefit and source of power. This is enabled (without rampant rising prices) because the US dollar is used for trade throughout the world and is held by foreign entities and governments as a reserve currency.
Bitcoin isn’t really a threat to the dollar right now. Sending BTC is slow, expensive, and Bitcoin can only handle about 20,000 transactions per hour. Unless this changes I don’t think Bitcoin will ever be used as money. If trade starts to happen in Bitcoin or oil begins to be priced in Bitcoin then the US government will likely view Bitcoin as a threat.
But right now Bitcoin has several advantages for the government. First, it is highly traceable since all Bitcoin transactions are public. I’m sure tying a person to a Bitcoin address is difficult but it can and has been done. Secondly, the meteoric rise in price and volume of trading means lots of taxable transactions and revenue for the IRS.
But if Bitcoin was a serious threat to the dollar the US government would try to stop it. The first step might be taxing and regulating it significantly. The United States is in the early stages of this first step. The next step might be making it illegal. A final step would be attacking it directly.
But making goods or actions illegal doesn’t make them go away, it just drives that activity underground. That doesn’t mean that government edicts banning something don’t have implications or impacts.
What might be the impacts of making cryptocurrencies like Bitcoin illegal?
The Impacts of Illegal Bitcoin
US Based Exchanges Would Disappear
Coinbase.com is the largest US-based cryptocurrency exchange. It would no longer exist or it would be forced to relocate to a jurisdiction where Bitcoin was legal and they would likely ban and block US customers. Current assets could be seized or forced to be turned over to the government.
Onramps and Offramps would be Reduced
There is a need for onramps and offramps between Bitcoin, government issued currency and real goods and services. Illegal Bitcoin would make it harder to convert Bitcoin and other cryptocurrencies from fiat and vice versa. Die hard Bitcoin enthusiasts might dream of a world in which transactions are conducted in Bitcoin and government fiat is not involved, but based on the current Bitcoin protocol that isn’t possible.
Additional technology like wrapped Bitcoin, which does exist, would be needed to make Bitcoin viable as money. However, this erodes some of the decentralized benefits of Bitcoin, as it requires a trusted custodian. But I digress.
Banks would refuse transfer fiat to known cryptocurrency exchanges. You wouldn’t be able to link your bank account to Coinbase for example. You wouldn’t be able to easily sell cryptocurrencies and transfer the proceeds back into your bank.
Apple and Google would ban all cryptocurrency related apps on their stores.
In order to get Bitcoin you would need to mine it, or find someone who already holds Bitcoin willing to exchange it for something you have. So there would need to be “back alley” exchanges. If one of these deals were to go south, there would be no legal recourse. Of course if you’re exchanging Bitcoin for goods and services with a friend or relative it might work out just fine.
The free market could step in to provide escrow services and some of the illegal exchanges might be trustworthy. Doubtless there would be more sketchy “pirate” exchanges but those might be the target of denial of service attacks conducted by governments. Trading on a “pirate” exchange would require trust in people willing to break the law. The number of exchanges that disappear with client funds or get hacked would likely go up.
Assembly, importing, selling and possession of Bitcoin ASIC Hardware would be Illegal
You can’t successfully mine bitcoin using a basic PC anymore. You also can’t successfully mine bitcoin using even a computer equipped with advanced graphics cards. Mining bitcoin requires ASIC (Application-specific integrated circuit) hardware and a lot of electricity. Owning or possessing this hardware would be made illegal.
People suspected of mining Bitcoins could also have their power usage monitored, similar to how law enforcement will look at the electricity consumption and temperature of houses to try to determine if marijuana is being grown indoors.
I’m sure this would not stop some people from illegally mining Bitcoin, but I do believe it would reduce the amount of miners in the US.
Larger Corporations Would Not Own Bitcoin
Tesla announced they purchased $1.5 Billion in Bitcoin back in January of 2021. This would be illegal and so a company like Tesla would almost certainly not do it. Companies found in violation would be fined, have the Bitcoins seized or would be prevented from doing business in the United States, one of the largest economies in the world. The US could also bully non-US companies into shunning bitcoin like they do with foreign companies who try to transact with countries the US has sanctioned.
ISPs Might be Required to Block Access to Bitcoin related Sites
This would be an inconvenience and would only stop more casual users. VPNs could be used to get around such censorship and so I don’t think effort to stop Bitcoin would be very effective. However, it would make it somewhat more difficult or slower to connect to nodes, or transact in Bitcoin. Barriers to entry, particularly for less tech savvy users, would be negative for Bitcoin.
Bitcoin addresses would be tracked
I know governments already track Bitcoin wallet addresses used or suspected of being used for illegal activity. Bitcoin is pseudonymous and somewhat decentralized but it isn’t anonymous. All Bitcoin transactions are available for anyone to view.
Government agencies in charge of enforcing a Bitcoin ban would no doubt spend a lot of time tracing large Bitcoin transactions on the network and attempting to determine who controls those addresses.
This is a complicated effort but given enough time and resources it could be done. This would be a challenging effort no doubt and the Bitcoin community would likely try to do coin mixing or work to make the network anonymous.
So those are some possible results I see unfolding if Bitcoin was made illegal. But just making Bitcoin illegal is only a phase 2 approach. Government could go even further and attempt to attack Bitcoin directly.
The Impacts of a Bitcoin Attack
A 51% Attack
If an entity or group controls 51% or more of the mining/hashing power of a network like Bitcoin they could prevent new transactions from taking place or being confirmed, they could mine empty blocks in which no transactions were processed or they could double spend their Bitcoins.
The US Government is willing to spend tens of billions of dollars on the war on drugs each year. They are definitely willing to spend more than that to defend US dollar hegemony if Bitcoin was a threat.
The NSA could build bitcoin mining data centers and launch a 51% attack on the Bitcoin network and they would be willing to spend Billions of dollars to do so. This would be challenging as it would require ASIC hardware and a lot of electricity.
According to this website an attack would cost $716,072 per hour. This would be about $6.2 billion per year.
The US government spent $29.4 billion on the war on drugs in 2018, so $6.2 billion is chump change. The attack would not need to be done for an entire year. They could do the attack for a few months, or a few hours each day, just to disrupt the network and cause chaos and tank the price.
A 51% Attack by the Chinese Communist Party (CCP)
Would the United States devote the money to launching a 51% attack on Bitcoin? I think so if it was a threat to the dollar. But I don’t know how likely that is.
A 51% attack on the Bitcoin network is perhaps most likely to come from the Chinese Communist Party (CCP). The hashing power and cheap electricity are already in China: 65% of Global Bitcoin Hashrate is Concentrated in China. Even if that number overestimates Chinese hashing power by 14% it is sill enough. An October 2018 study wrote, “As of June 2018, over 80% of Bitcoin mining is performed by six mining pools, and five of those six pools are managed by individuals or organizations located in China.”
A more recent estimate predicts 65% of the Bitcoin Hashrate is concentrated in China. By my own determination of country designation, in conjunction with data from https://www.blockchain.com/charts/pools, Chinese affiliated mining pools account for at least 55% but perhaps up to 62.5% of the last 587 blocks mined (as of 28 February 2021).
That doesn’t sound very decentralized.
The Chinese Communist Party (CCP) could infiltrate the Bitcoin mining organizations in their country in a more clandestine manner or they could seize the Bitcoin hashing power directly. They wouldn’t need to build a new data center or account for new electricity needs, the hashing power and electricity generation is already there.
Electricity in China is very inexpensive compared to nearly all the rest of the world.
The Chinese Communist Party has no problem using cheap, dirty coal to generate 68% of its electricity. As an aside China accounts for 30% of global CO2 emissions. However, some of the power also comes from the abundant and inexpensive hydroelectric power found in certain Chinese regions.
What would motivate the CCP to attack Bitcoin? If it was a threat to their power in some way. Perhaps if it was being used to circumvent their taxes, regulations, capital controls or is just viewed as a threat to their centralized communist ideology. If enough organizations in the west held Bitcoin it might behoove the CCP to destabilize BTC to cause economic disruption for their enemies.
I’m sure the Bitcoin community would come together to try to work around this attack, but it could be highly disruptive. Such an attack doesn’t need to destroy the Bitcoin network forever, it just needs to shake the confidence of enough Bitcoin holders to get them to sell and dissuade enough would be Bitcoin buyers and thus tank the price.
I Don’t think the Government Can Kill Bitcoin But It Can Significantly Maim It
I don’t see much motivation for the US government to make Bitcoin illegal as it isn’t a threat to the dollar. But if it did and they made BTC illegal it would probably reduce the number Bitcoin users by taking away onramps and offramps and prosecuting people found in violation of the law.
Like the war on drugs or prohibition of alcohol I don’t think the government can kill bitcoin just by making it illegal. Through an attack government could cripple Bitcoin and leave it in a semi-comatose state in an out of the way convalescent facility where only a few devoted friends come to visit.
The CCP could be in the best position to successfully attack bitcoin due to their inexpensive electricity and that the majority of hashing power already existing within their jurisdiction.
At a minimum such an attack on Bitcoin would surely result in a price collapse. Would Bitcoin be able to recover? I don’t know. Bitcoin has survived various other incidents and selloffs only to make new highs. So far the HODLers have been well rewarded. But understanding the risks posed by a high concentration of Bitcoin miners in China is important for those who own Bitcoin.
Gold isn’t money, silver isn’t money and I don’t think Bitcoin will ever be used as money. To be fair I don’t think gold and silver will ever be money again–not in a digital world.
What is money? “Money is a commonly used medium of exchange. People wishing to achieve their ends often have to trade. They can exchange their goods directly, if they have matching preferences and suitable goods, or indirectly, with the help of another good, the medium of exchange.”
They key word in the above definition is commonly used.
Bitcoin is very expensive to transfer and it is slow. For large sums of money it is comparable to a wire transfer. But for day to day transactions Bitcoin simply doesn’t deliver.
“The standard set by the Bitcoin community is six transfer confirmations before it is complete. Each confirmation can be expected to take about 10 minutes, thus getting an average of one transaction per hour.”
The fees are also not cheap. The cost is based on a variety of factors but according to this calculator a transaction would cost between $5-10 at the time of this writing.
That’s a bargain if you want to transfer large amounts (say $20,000 or more) of value outside the banking system but not great if you’re buying a coffee.
On a volume perspective Bitcoin is somewhat archaic. It can process about 20,000 transactions per hour. Compare this to Visa, which can process 65,000 transactions per second.
So unless Bitcoin becomes transactions become dramatically faster, cost less, and allow for more volume. It is difficult to see how Bitcoin would ever be used as money.
If ever there was a case study on the advantages of name recognition and first mover it is Bitcoin. There are dozens if not hundreds of altcoins technologically superior to Bitcoin, that have a market cap significantly lower than Bitcoin. Some of the major Bitcoin flaws I see are the following:
Bitcoin is slow, taking a minimum of 10 minutes per transaction but realistically at least 20 or more minutes.
Bitcoin transactions are expensive
It is energy intensive
Source: bitcoinfees.info
Let’s say you want to use Bitcoin to buy a $2 cup of coffee. You’re going to have to pay $0.36 cents, wait 10 minutes for the transaction to get picked up, and nearly all vendors require 1-2 transaction confirmations to prevent double-spending. It doesn’t work practically speaking.
And yet the Market Capitalization of Bitcoin is over $143 billion. The next closest cryptocurrency, Ethereum, doesn’t come close, having a market cap of $18.8 billion.
The price and Market Capitalization of Bitcoin peaked in December of 2017. The market cap was as high as $327.1 billion on the 16th of December.
Bitcoin was groundbreaking and truth be told I still own some Bitcoin. But I believe that if another cryptocurrency took its place as the biggest crypto by market cap it would be a good thing. I’m calling for the death of Bitcoin.
I also think this provides an investing opportunity, or perhaps more realistically, a speculative opportunity. There are a variety of other cryptocurrencies that excel far beyond Bitcoin in a variety of ways, be it speed, security, anonymity, energy efficiency, user-friendliness, the list goes on.
I think this provides a speculative opportunity. Cryptocurrencies like EOS or other projects with real-world use cases could go up dramatically in value. There are hundreds of cryptocurrencies and a lot of them will probably be worth very little in the mid to long term.
It’s worth educating yourself on the various cryptocurrencies projects apart from Bitcoin. It might be worth investing in a few if you think they could have future promise.
Coinbase has a program that allows you to learn about various cryptocurrencies and earn free crypto at the same time. My referral link for EOS can be found here coinbase.com/earn.
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