Well, I am not an expert. These are not financial advice. These are just observations that I am going to write down below.
Well, I started bitcoin investing maybe 2-3 years from now. That was not a cycle like now, bitcoin reached 14 lakh INR and crashed then to 4 lakh INR. Today it is around 48 lakh INR. So, what has changed?
Earlier bitcoin was all among retailers. The crash doesn’t mean everyone sold it. (Many did). There are people who will HODL (Hold on for Dear Life), like me. And there were many such people who are holding for years.
So, what is bitcoin?
It’s like some “unit” that a code has generated. And there is a huge network of people maintaining the record, like how many units each person has, and these people who maintain the records are called miners. They earn for running their computers and maintaining records. Let’s not get deep into it. It’s complicated. You can become one too. Google it.
Bitcoin is not a currency still. Because if you think of it as a currency, it should have no charge like Paytm has no charges for INR. But one transaction in the BTC network will consume around 2500rs as transaction charges. And then people are just accumulating it. One-third of BTC is never transacted, maybe because of high charges. High charges are required to maintain records of quantity transacted and hold over the network.
So, what is it now. It’s digital gold. Gold that you can buy as little and store easily. And is truly limited. It’s just 21 million and fixed while Gold, we are still discovering.
And the adoption is higher too, people are buying and buying. So, what made gold a unique metal with a high price, was the adoption among people. The same is happening to Bitcoin.
Now, you will say there are hundreds of cryptocurrencies. But then what? There is only one Gold when there are so many useful metals.
You don’t have to take chance, you just have to spare some money, that you either waste in high-class restaurants and drinking high-cost beers/wine.
Now, let’s come to what is happening right now? What has really changed in this cycle.
Earlier cycle, there was an only retail investor, that was buying less. Now, there are a lot of corporates from Elon musk to everyone, buying it around the globe.
So, why I don’t think is a bubble yet?
If everyone is buying with the HODL concept and never selling it. How will it fall?
A bubble happens when long-term investors start behaving like short-term investors. But here everyone is in a long-term game. People are selling their assets to have bitcoin.
Let’s see where it goes. Either you can watch the game from outside, or just put a little stake.
Well, for that, you can open an account in an exchange like below, transfer money and buy, its’s easy. :
Wazirx - India’s largest exchange - https://wazirx.com/invite/th35dyac
Binance- World largest exchange- You can use the P2p here. Means buy from a person directly and not from the exchange. Register with my link as below, it will give you 10% off in trading fees, if you directly sign up, you won’t get 10% off- https://accounts.binance.cc/en/register?ref=G2D1IZ85