Everyone wish that they have invested in Amazon stock when it was 10 years ago. But how many did really invest back then? How many could predict the future? How many could say that they will know for certain a certain stock will rise exponentially? The answer is, almost nobody.
Currently, many people see investing into bitcoin like investing in Amazon stock 10 years ago. There is a lot of potential for exponential rise, but there is also significant risks. Who can say that bitcoin will definitely rise to a million dollars or more per coin? Who can say it will crash and go to near zero?
With the price of cryptocurrencies falling to such ridiculously low prices, is investing in them wise? With the current total market capitalization of only less than 130 billion US dollars, the whole cryptocurrency space is really tiny. And with bitcoin currently at about 70 billion US dollars, it is even smaller than the net wealth of a single individual such as Bill Gates, of about nearly 100 billion US dollars. Imagine one single person controlling the whole market capitalization of bitcoin, how tiny it is.
And, bitcoin is currently global. It is also known as the internet currency, just like every other countries that have their own currencies, the currency for the internet is bitcoin. With so many exchanges everywhere in the world available to convert fiat currencies to digital internet money, it does seem a little silly for the current state of market capitalization of cryptocurrencies.
But who is to decide how much a bitcoin is worth? You, me? Nobody. It’s the market, collectively deciding how much a bitcoin is worth at this current moment. And markets are known to be erratic, and not logic. Bear markets can make you become insolvent longer than you can think. Maybe it is the bottom, maybe the bottom is still 90% lower still, nobody really knows. And it is constantly being manipulated by high net worth individuals aka whales. There is really no way to know.
Sometimes it is easy to say, only invest money that you can afford to lose. But reality is, all money is precious and many people cannot afford to lose even a small amount of money. A better way of investing is to only invest according to how much you really understand. If you have learned and fully understand how much cryptocurrency can become in the future, then invest accordingly. If you think the future is bleak, invest only a little or do not invest.
The only best method is to think long term. Do not focus on short term market fluctuations, it may increase 20% per day, it may also drop 30% the next day. It can be a roller coaster ride, and make you feel like you might have bipolar disorder. One day euphoria, and another day depression. One of the strategies that most people can use is dollar cost average. Set a strategy and stick with it. Plan for example that you will invest $20 per week for 1 year. It will cost you about $1040 per year. Maybe $20 per week is like 2-5% of your monthly wage. If you set with a strategy and stick to it, you will not be affected much by the volatility. You will be able to purchase more bitcoins when the price drops, and purchase less when the price rises.
A word of caution, is to never forget about your plan. Be careful not to FOMO or fear of missing out. Most of the time, people will think that a certain stock has bottomed, but nobody really knows. It may even drop another 50% before it rebounds to 1000%. Who knows for sure?
Long term wise, bitcoin is a worthy investment. Over the last 10 years, the price has been steadily rising. If in doubt, zoom out and think long term. In the next 10 years, how will people use bitcoin. The use cases might not even be thought of or developed yet. Maybe not even 1 year or 5 years from now. We may think that bitcoins will be able to support micro-transactions, we may think that bitcoin may be used to buy drugs illegally from the dark web, or we may think that foreign workers use bitcoin to send money home to their families working abroad. But in the next 10 years, the main use case of bitcoin might even change.
So when is the best time to buy? Today. Invest with all your faith and believe, and even if it fails one day, at least you can say, what a ride, what an experience to be in this space.
If you notice, every digital payments app or website that you use, they are not fully integrated with one another. For example, you have some balance in your paypal account but you cannot send those funds to your mobile cash app and vice versa. Imagine the possibilities with bitcoin as the main bridge to all apps. Bitcoin can be used by anyone to pay for online game currency. Someone can pay to unlock a certain stage in a game with cryptocurrency. Someone can transfer money from one app to another, apps developed by different companies, instantaneously.
The world we are living now is about innovation and integration. Our smartphone is a good example. Back in the days, there were cameras, telephones, televisions, modems, radios, computers. Now we have, smartphones, all fully integrated into one, powerful device. Think of bitcoin the same way, think of how bitcoin can be integrated into everything, and suddenly, there is unlimited possibilities.
Maybe a little ideas to spark future innovations.
Bitcoin and electric cars. Automatic settlement for charging your vehicle, all in micro payments. A satoshi for every kilowatt per hour charge.
Bitcoin and online games. Paying for online items with bitcoin, and receiving bitcoin into your bank account.
Bitcoin and cash apps. Sending money from one app to another no matter what mobile wallet app you are using.
Bitcoin and Facebook or social networking apps. Sending money via instant messaging.
Bitcoin and Google. Automatically donating to a certain website that you support, although in very small amounts. For example, for every time you visit a site, you donate 1 satoshi.
Bitcoin and artificial intelligence. Computers automatically paying your bills, planning financially and even robo trading.
Now imagine, bitcoin and electric cars, online games, cash apps, Facebook, social networking apps and Google combined, like how smartphones combine cameras, radios, TVs. The possibilities are endless.
And, combining all these together in this era is not all that difficult. It’s an evolution that will lead to unimaginable things in the future.
We might not even think of such thing might have purpose at this moment, but it might be a significant life changing thing in the future. Maybe healthcare? Maybe it will change the way we work in the future? We may never know how things evolve. And it will evolve faster than we will think it will. And the growth will be exponentially unimaginable.