Whether you see bitcoin as a short-term investment, a hedge, a new asset class, or a store of value, one thing is for sure, bitcoin is here to stay and it is thriving.
Bitcoin has surged last on Monday (November 30) to its new all-time-high price of $19,864 bringing its year-to-date rise to an astonishing 140% and counting.
Here are 5 possible reasons why:
- Institutional interest has been increasing: several institutional players such as the Guggenheim Funds Trust, a hedge fund worth half a trillion dollars have been seeking the SEC’s approval to take a position in bitcoin, investing close to 10% of their net asset value in Grayscale Bitcoin Trust (“GBTC”) sending a strong signal to the markets.
- Bitcoin is a hedge: a series of high-profile investors have been flocking into Bitcoin as a hedge against the future inflation such as Ricardo Salinas Pliego, Mexico’s second-wealthiest man with a combined fortune estimated at $13.2 billion, who has been revealing he now holds 10% of his liquid portfolio in bitcoin, labeling government-issued fiat as being “worth nothing”.
- Bitcoin as a treasury reserve asset: large corporations such as Nasdaq-listed Microstrategy, converted 80% of their cash ($425 million) into bitcoin as their primary treasury reserve asset. Similarly, Square has been buying $50 million worth of bitcoin representing 1% of Square’s total assets with the same goal.
- Paypal paving the way for widespread adoption: allowing users to buy and sell a token that is following the price of several cryptocurrencies and use them as a funding source for e-commerce on 26 million merchants worldwide.
- The OCC letter: allowing state banks to hold cryptocurrencies for their customers and act as the custodians for a close to $200 billion in market capitalization.
So whatever your stand is on Bitcoin, it’s time to think of the future of your portfolio.
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