It’s a bird. It’s a plane. It is.. BTC ₿

Bitcoin still has the same issues for purists. There is no large legal use case – many like remittance have been promised, but none have been delivered at scale.  For the most part, you still require the ability to convert it to fiat currency to be able to use it for consumption. And it happens to be really volatile making it an unsuitable hedge from a pure investment perspective.

What has improved though is the BTC eco-system which has grown stronger and gone more mainstream. It is no longer a niche currency. Large corporates are investing part of their treasury in BTC and are becoming more vocal about it. A lot of successful investors are coming out in favour of BTC and acknowledging some of the strengths inherent in a decentralized store of value.  Most central banks are comfortable to allow BTC exchanges even though they may stop short of accepting it as a payments mechanism. Here it is important to note that the value of all BTC in the world is still a paltry USD 336 Bn. Compare that to the USD money supply M2 which as of Oct 2020 was at US 18,658 Bn. It is still unclear how central banks will respond once BTC becomes large enough to be systemic.

Depending on how you think, BTC is either a monetary revolution waiting for wider acceptance or our very own tulip mania. Even the biggest BTC bulls acknowledge this when they suggest 1-2% BTC exposure in your portfolio. It is another way of saying BTC has huge option value on the upside but the odds that it will make it as a modern-day version of gold is still highly uncertain.