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9 reasons why Bitcoin might just save our Pension

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bitcoin pension

You cannot turn your face from mainstream media these days without hearing the word ‘bitcoin’.  Even President Trump tweeted about it.  

 Bitcoin is no longer that awkward dinner table conversation, it is now part of the agenda of the boardroom meetings. With the genesis block about 10 years ago, Pandora’s Box has been opened.

Fidelity, JP Morgan, Blackstone, Goldman Sachs – all are trying to get involved with Bitcoin and Blockchain one way or another.

While there are numerous use cases of Blockchain, according to the WEF, a new rhetoric has surfaced about Bitcoin’s potential to save our Pension fund.

Everyone by now has heard about the shambles that our pension is in.

Bitcoin is deflationary

Did you know about 4 Million bitcoins may have been lost forever?  That means, even when every last bitcoin out of 21 Million possible bitcoins have been mined, we may only be able to access around 17 Million of them.

There were around 36 million millionaires in 2017.  That number increases each year. It is mathematically impossible to distribute one bitcoin per millionnaire, even when people are willing to spend money.

None of the other financial assets (we are not talking about art work/collectibles/real estate/etc.,) share that kind of deflationary dearness.  

That increasing demand pressure makes bitcoin one of a kind asset to hold.  If it continues its progress trajectory, then adding it to a pension fund could help mitigate the slump in other asset classes in the fund.



Non-correlated nature as a hedge against recession

Bitcoin does not share the market sentiments or behavior.  If market goes north it could go south or it could follow the market pattern and sometimes it does the exact opposite of whatever the market is doing.

This lack of correlation is, according to financial gurus, is a desired attribute in an asset that could be used as a hedge against market risks.

Anthony Pompliano of Morgan Creek Digital Assets makes case for Bitcoin as the non-correlated asset as a hedge against financial turmoil.

The losses endured during the 2008 recession was over 12 Trillion dollars and some estimates suggest that it will not be until 2023 before we can catch up to cover those losses.  However, there are talks about another recession on the horizon.  

Exact implications of recession on bitcoin are not known since bitcoin never went through a recession in its life, however, a case can be made that its non-correlating nature could work in its favor in the face of a recession.

Best performing asset in the past 10 years

As of May 2019, Bitcoin was the best performing asset in the world in any class for 2019. This was when Bitcoin was trading at $5000. As of this writing, Bitcoin is just about $10,000;  An incredible 100% increase since it was named the best performing asset globally. There has not been any other asset that has performed as well as Bitcoin has.  

According to Anthony Pompliano “it’s the best performing asset class over the past ten years – it’s outperformed S&P, DOW, NASDAQ, etc. during the longest bull run. It experienced two 85 percent drops during that time, but [it’s] still up over 400 percent in the last two years.”  

The growth is expected to continue as more and more financial institutes join the bitcoin revolution.



Off the chart price speculations 

Predictions around bitcoin prices are outrageous.  

Even most common prediction of one million dollars per bitcoin over the next decade means a 100x growth from its current $10,000 price point.  100x in next decade puts it around 10x per year average growth. That’s 1000% per year over the next ten years.

John McAfee made headlines with his million dollars per bitcoin prediction bet by 2020.  While a million dollar bitcoin does not seem to be in the cards for 2020, we can never write off its potential over a 10 year trajectory.

Millennials trust bitcoin more than banks

Millennials make up for more than 35% of the US labor force making them the largest generation in the labor force.

Millennials trust Bitcoin more than banks. This means, the largest labor force demographic is now going to put their money in bitcoin more than banks.

Demand dictates price. This is simple economics. These millennials have at least 20-30 years of working life ahead of them and if they decide to put even a small percentage of their earnings into bitcoin, that itself works out to be a huge demand.

If this demand translates to continuing upward trajectory of bitcoin then it makes sense that pension funds can benefit by diversifying even a fraction of their portfolio into bitcoin.

Bitcoin can help avoid misappropriation of pension funds 

What happens when you do not realize that your employer or whoever is handling your pension fund has been cheating you until after you retire?  What if it is too late at that point?

It is not just blockchain for bitcoin investments in the pension funds, moving the whole pension records to a blockchain, specifically bitcoin based blockchain, could ensure that funds are not misappropriated and every cent is accounted for.  

If the price continues to increase in bitcoin as the adoption grows, then dedicating part of the portfolio to Bitcoin may also help accelerate the growth.  Not such a bad thing.



Huge upside potential

Only 2 wallets existed about 10 years ago.  Today, we have over 40 million. The crazy part is not that we went from 2 to 40 million, it is the fact that the existing wallets do not even represent the 1% of the 1% of potential user base of Bitcoin that could be touching it directly or indirectly over the coming decade.

If Bitcoin’s price is where it is at 1% of 1% market penetration, what happens when it reaches full 10% of its potential market?  Or what happens when it reaches 50%?

There is no other technology or investment vehicle out there with such a huge upside potential.

Morgan Steckler of iTrustCapital, an expert on Retirement arena specializing in Cryptocurrencies says “For a retirement account or pension, even having a small exposure of your overall portfolio can provide you with that “what if” upside, and could lead to something that can truly change and transform your retirement years.”

Safe haven better than gold

Mark Cuban doesn’t like Gold and Bitcoin, however, he dislikes Gold more than Bitcoin. In his own words “And the good news about Bitcoin is there’s a finite supply that’ll ever be created.”

Countries going through inflation have used Bitcoin

This trend has been more common these past few years.  Countries where people are experiencing higher inflation are flocking to Bitcoin. Zimbambwe/Venezuela/Argentina/etc. Show the numbers.

While selling at premium in these locations is exciting for Bitcoin fans, the more exciting thing is about the growing demand in countries where fiat is failing its people.

This ‘flocking’ to bitcoin only increases its demand and further making it more dear.

Negatives to consider

These are the 5 things that work against the above hypothesis (to keep this conversation balanced):

  • Lot of ambiguity from a legal framework standpoint
  • Lot of competitors within crypto space 
  • Mainstream project, like Facebook Libra, if adopted, could hamper Bitcoin’s trajectory
  • Lot of newer generation blockchain protocols are emerging every day
  • Beyond this, all investments come with inherent risk and one should understand what they are putting money into and the risk they are comfortable with

This article was written for informational purposes only. 

Thank you for reading and sharing this article. 

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IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

About the author

RK Reddy holds two Masters degrees, one in Accounting and another in Business Administration with over 15 years of experience in the financial services industry.

Read more about the author here.



CryptoSpace

All Roads Lead to $100K Bitcoin: Various Perspectives that Support $100K BTC

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Bitcoin to 100K

Bitcoin to 100K

There are a lot of theories in the crypto space that argue that Bitcoin will reach $100,000 before the next halving.  Some even argue that we could reach that price point before the end of 2021.

Here we have compiled a few perspectives that support a higher price point for Bitcoin.

IF we missed any, please let us know and we will be glad to add it for others to read.

Bitcoin’s ability to reward savers

If you saved $100,000 throughout 2017, today its value would have been $94,000, a total loss of 6% due to inflation. That is without considering the fees and hidden charges that institutes charge.

Even if you invested in the S&P 500 for 12 months at $8333 each month throughout 2017, your portfolio value today would have been $110,000.

If you saved $100,000 in Bitcoin throughout the 2017 (prices ranged from $920 through $14,000 during Jan 2017 through December 2017).  For the purposes of this comparison we are using the last week prices from each month as available on Coinmarketcap historical snapshots.

$100,000 invested in equal amounts throughout 2017 would look something like this.

Bitcoin to 100K

Since 2017, Bitcoin price has crashed and rebounded.  At the lowest point of the crash of $3000 per bitcoin, your portfolio value would have been $144,000.

In today’s average price of $16000 per bitcoin, your $100,000 savings would have been worth $770,000.

Due to its increasing demand and reducing supply, Bitcoin is expected to reach $100,000 in the next 4 years. Some models show that bitcoin will be worth $1 Million by 2030.

Only time will tell us whether bitcoin reaches these prices or not, but point being, no other asset of any class has crazy growth predictions like Bitcoin has.

Stock-to-flow ratio

According to Plan B, Gold had the highest stock-to-flow (SF) ratio of 62.  That is, it will take 62 years to produce the gold that is currently in the market.  In other words, you cannot willy-nilly inflate the supply in a year or two due to how scarce gold is and how difficult it is to find and mine it.

Current SF for Bitcoin is 25, however, by the end of 2020 or 2021, this could jump to 50.  By the next halving in 2024, Bitcoin could surpass the SF of gold.

According to Plan B, “The predicted market value for bitcoin after May 2020 halving is $1trn, which translates in a bitcoin price of $55,000. That is quite spectacular. I guess time will tell and we will probably know one or two years after the halving, in 2020 or 2021. A great out of sample test of this hypothesis and model.”

However, following the trajectory of Plan B’s SF analysis, Bitcoin could easily reach $1 Million dollars by 2030, according to some commenters.

Stimulus and unlimited printing of fiat

COVID has exposed another flaw in the fiat system.  It is that governments can print as much money as they wish whenever they wish to do so.

Whenever governments resort to simply print money without having a basis in asset value or growth in GDP, it erodes the value of the fiat in circulation.

This is what happened to Argentina, Venezuela, Zimbabwe and more.  

The US dollar has lost over 99.97% value since 1900.  For instance, whatever you could buy with $1 in 1900 will need $31 today.

COVID has added salt to the wound for fiat.  It exposed the blatant fact that governments can and will print money to their whim without regard to the inflation and impact on savers.

This increased supply in fiat helps stock market and market liquidity which in itself helps people who are invested in the stock market and other vehicles which is generally the wealthier part of the society.

Other factors strengthening the crazy Bitcoin price predictions

  • Institutional FOMO, for instance, Square, PayPal, Grayscale, etc., entering the market
  • Easier onboarding of new retail investors
  • Greater technologies and DApps being built on Bitcoin 
  • Great DeFi services to lend and borrow money
  • Globally accepted single denomination that does not need to be converted in the future (with enough places accepting bitcoin)

What other factors do you think will contribute to Bitcoin’s shooting past the $100,000 barrier?

Let the FOMO begin…

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

 

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Crypto Roundup: All Your YouTube Influencers in One Place

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Crypto Roundup

Visit our Crypto Roundup section daily for a dose of all your favorite Crypto YouTube influencers in one place.    

Worried about missing updates from your favorite YouTube crypto influencers?  

Welcome to the Crypto Roundup.  

On this page, we will post a quick summary of the videos from some of the most popular YouTube crypto influencers.

Ivan on Tech  Altcoin Daily

Crypto Zombie Box Mining

Ellio Trades Lark Davis

Data Dash Bitboy Crypto

MMCrypto Chico Crypto

Altcoin Daily

Video title: Bitcoin Will Be OVER $20,000 By Christmas 2020! BIGGEST WEALTH SHIFT OF OUR LIFETIME! Cryptocurrency

Date: 19-Nov-20

  • World’s biggest wealth shift of our lifetime is happening right now and no mainstream media is talking about it, except CNBC.

  • Preston Pysh predicted on August 26th that: “Bitcoin should be reaching its all time high by Christmas.”

  • If you are looking to buy a dip, there may not be one.
  • Ricardo Salinas Pliego, a mexican billionaire, has just revealed that 10% of his liquid assets are into bitcoin.

Lark Davis

Video Title: STOCKS HIT NEW HIGHS! WILL COVID VACCINES LEAD TO MEGA PUMP IN 2021? [Are You Ready?]

Date: 19-Nov-2020

  • Stock markets and bitcoin pumps higher on the news of the second successful covid vaccine.
  • There could be more chances for the new stimulus. Means more inflation, more debt and simultaneously pumps stocks, gold and bitcoin.

Crypto Zombie

Video Title: BITCOIN $18.5k TOP!!?! DON’T BE FOOLED!! HODL FOMO BEGINS!!! $TRILLIONS FLOOD!!

Date: 18-Nov-2020

  • Overall sentiment of Bitcoin has changed drastically from ICO craze in 2017 to a time where people are FOMOing to own more bitcoin.

Ivan on tech 

Video Title: BIG WARNING TO ALL HODLERS!!!!!!!!! DO NOT GET REKT!!! BITCOIN $18,500 REJECTED – NOW WHAT?

Date: 18-Nov-2020

  • Ivan expects bitcoin to shoot past $20K resistance before end of this year, giving it 85% probability

Chico Crypto

Video Title: World’s Most Powerful Turn BULLISH on BITCOIN

Date: 19-Nov-2020

  • All those who hold big bags of Bitcoin will come out of the shadows to talk up the Bitcoin rally, a $20K bitcoin could be on the cards before the end of this year
  • Ethereum mining could act as a big catalyst for Ethereum’s price
  • Big companies like google could play a bigger role in mass adoption of crypto

Let the FOMO begin…

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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Lessons from the Veteran HODLERS to the Newbies!

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Lessons in Crypto

For all those who entered the crypto market after the 2017 bull run – here are few lessons from the HODLERS from the last bull run(s).

This is our attempt at making all you newbies aware of the mistakes veteran cryptoers did.

Let’s get started…

Don’t FOMO in to all the hype

FomoIt’s hard not to FOMO in crypto.  The trick is to make sure you don’t lose your shirt in crazy bets.  Always limit your bets to what you are comfortable losing.

The common ways you can become victim of FOMO are:

  • Following your favorite YouTuber without actually doing your own research on the project.
  • Investing into projects at the top.
  • Believing in promises of 100x or 1000x without any substance behind those claims.

HODLing far too long

Remember why you are into crypto – to make the money.

Never fall in love with your crypto, and HODL the tokens even when they are 10x and more.

Have a strategy to take your capital out before you become a HODLer.  

If you believe the project really has what it takes to go beyond 100x and more, just sell in instalments so as to not miss the ride.

One of the best ways to HODL is to take your capital in full and profit in tranches.

This rekt story will give you a right perspective of what it looks like, it’s one of many:

Don’t put all your eggs in one basket

Never go all in on one project. No matter how strong the project may look, even the projects with strong fundamentals don’t do well sometimes. 

And, you will be kicking yourself watching other projects go up and your portfolio just doesn’t seem to make a move.

And don’t over do it and have a portfolio with over 100 projects either. It is very difficult not to have invested in more than 15 projects but anything less than 20 is a good way to go, in our opinion. 

Put aside the share of Profits for Taxes.

One way you can get a good night’s sleep is by paying taxes. 

Always keep a habit of putting aside a % of your profits in USDT or other stable coins, as a reserve to take advantage of market volatility and also to meet your tax obligations. 

Exchanges are more evil during bull run

Foreign ExchangesDon’t trust exchanges. Yes we already know that, but they play more games during bullrun, some intentional and some technical. 

Many exchanges tend to go under maintenance when the prices shoot up too high too soon (Coinbase?), and you can’t sell. 

And the shady exchanges scam out before you know.

Regulators seem interested when the market cap of these projects goes through the roof, which then adds FUD around the project crashing the prices.  

Exchange may freeze funds pending investigations when such issues arise.

Take for example OKEx. Users are unable to withdraw their assets from the exchange for almost a month now, not certain if they ever will, and all that started with the legal dispute.

Never fall for Arbitrage gains

Arbitrage is when you buy in one exchange at a lower rate and sell on the other for a higher rate to take some profits. 

Some shady exchanges show a lot higher prices than the other genuine exchanges and when you deposit your assets to sell at those prices there won’t be actual volume to execute the trade. You may be stuck with either a high fee for withdrawal or other funky rules to take your own money out. 

Remember, there is no free Giveaway

Free CryptoScammers rise with the rising market.  

When the crypto market buzzes with all time highs – scammers cash in big time on newbies.

The most lucrative scam in crypto is ‘Free Giveaway’. Whether it be through YouYube ads or discussion groups and wherever they can get your attention.  Read this article on various sophisticated scams that are being deployed.

We hope these lessons help you through your trades and crypto life.  Stay safe and always DYOR.

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

 

Continue Reading

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