Bitcoin Crushes All-Time High

The market’s too “uncertain” to buy Bitcoin, they said. Government bonds are the place to be, they said. They were wrong all along, and now Bitcoin’s tapping another all-time high price against the dollar.

Some amateur traders bought near the short-term Bitcoin peak right around President Trump’s inauguration day. They completely ignored the age-old principle of “buy low, sell high,” and ended up buying the top and then panic-selling after Bitcoin pulled back.

That’s a shame, as all they had to do was hold on for a little while. My advice for them would be to focus on time in the markets rather than timing the markets; just start accumulating some Bitcoin and don’t obsess over the current price too much.

Meanwhile, the legacy media pundits are scrambling to find reasons why Bitcoin shot up to $111,000. They’ll cite institutional demand for cryptocurrency, and that’s accurate but it’s only part of the story.

What they don’t want to mention is that the Trump administration didn’t abandon cryptocurrency, so there’s no political reason for the Bitcoin price to go down now. Sure, the President may have put his crypto ambitions on hold for the time being, but there are immediate priorities such as the ongoing trade war.

Courtesy: @0xPurpleDude

Another contributing factor is the expansion of the global fiat money supply, shown as the M2 line above. This expansion has been in effect for many years, and since we’re measuring Bitcoin’s value against the U.S. dollar, a Bitcoin rally was inevitable.

There’s also probably some market rotation in effect. If gold and Bitcoin are the two global go-to anti-inflation assets, and gold had its rally earlier this year, now it’s Bitcon’s time to shine. Understand, however, that’s it’s entirely possible for both gold and Bitcoin to move higher.

Also understand that gold isn’t just a “risk-off” asset and Bitcoin isn’t just a “risk-on” asset. Owning some Bitcoin can actually have a de-risking effect on your portfolio if you’re concerned about holding too much fiat currency, which tends to lose its purchasing power over time.

Ultimately, asking why Bitcoin is hitting new all-time highs now is really asking the wrong question. The right question is how much you should own. The answer depends on the size of your portfolio and your risk tolerance; generally speaking, it’s fine to keep a small portion in Bitcoin as long as you understand the risks involved.

Courtesy: @CryptoEmpressX

Folks who accepted the risks with Bitcoin have been generously rewarded in recent years. Believe it or not, Bitcoin’s total market cap could soon overtake famous technology companies like Apple and NVIDIA.

This won’t happen tomorrow or next week, but is there really any doubt that Bitcoin will join the $3 trillion club at some point? Hardly anyone saw this coming back when the Bitcoin code was written in 2009.

So now, we’re seeing the pundits predict Bitcoin possibly reaching $130,000 by the end of this year. It’s funny how they only make these optimistic predictions after Bitcoin just had a big rally.

Where were they when the Bitcoin price was much lower? Imagine how much more their profits would have been if they had actually applied the “buy low” principle instead of just giving it lip service.

But then, it’s also fine to add a little Bitcoin even after it hits a new peak price. After all, it’s about “time in the market” and thinking about the long term instead of following mainstream pundits who truly couldn’t care less about your prosperity.