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

 

 

..it can use laws, regulations, and outright coercion to come out on top: a determined government is always going to win the battle for currency supremacy, at least in the long run.

Other transaction media may thrive, but the government currency will be at the centre.

: Kenneth S. Rogoff, The Curse of Cash

 

 

 

Yeah, it is bitcoin (BTC). Not superman 🙂

 

Since a sub USD 5,000 low in March, it has gone on to rally past USD 18,000 mark and is really close to its all-time high at USD 19,783.

 

With the rally has also come a surge in interest in bitcoin. Not a day goes when we are not asked about bitcoin or crypto. We did a fairly detailed Kuvera Insights conversation on BTC with Gaurav, CEO at bitbns.com and Advait, senior correspondent at Bloomberg Quint in late June. BTC was still under USD 10k then but had already doubled from March lows. It lays the groundwork on the issues surrounding BTC and what an investor can expect.

 

So what has changed?

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.

 

 

So where do you stand on bitcoin? If there is enough interest in BTC from our community, we will do a more detailed post on how to invest in BTC. So do let us know your thoughts.

 

Happy investing,
Gaurav
CEO | kuvera.in | @rustapharian

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1 Responses

  • Jay

    November 26, 2020 AT 08:56

    Excellent article and waiting to see platforms like Kuvera to start provision for investments in BC