Please note: Dapp.Tech does not offer financial, legal or investment advice. Please seek qualified advice before investing and only invest what you can afford to loose.
At this point, you may be getting used to all the Bitcoin headlines. Well, they aren’t going away anytime soon. And that’s due to cryptocurrencies like Bitcoin are here to stay. If history is any guide, is still only the beginning of an epic global revolutionary story.
Bitcoin seems to be the most lucrative trading opportunity since the early days of internet stocks such as Amazon during the dot-com era.
If this sounds a little scary as well as exciting, you’re not alone. The digital currency market holds real risk, but also great opportunity right now.
Traders (rather than investors) are seeing the huge opportunity trading the volatile swings, while investors can still buy in during the ‘early days’ of this industry. Novice investors wanting to enter the market, should do with money they can afford to loose – and my tip would be to hold your investments long-term. If Bitcoin drops 20-30% shortly after buying, it’s best not to succumb to fear and sell cheap. That is the biggest mistake new investors make. A better strategy is to invest and not pay too much attention to price swings, after a few months you should see some pretty lucrative returns and if not at that point, holding your investments longer should see this happen at some point over the next year.
Amid the wild price fluctuations and exciting blockchain headlines, it is important to see the bigger picture. Bitcoin and all other cryptocurrencies (yes there are others — 800+ and counting) are the start of something big. That’s because the blockchain, a technological accounting protocol, is an idea whose time has come.
In very simplistic terms, the blockchain is a set of thousands of interconnected ledger books where anything that gets updated on one copy of the ledger is copied on all of them. The implications for efficiency within and across any given political borders are quite staggering. Whether it be land rights in developing economies or lower fees on e-commerce transactions, blockchain technology enables value transfer without a middleman and promises many more possibilities.
The latest run-up in Bitcoin’s price looks to be an indication that many more are starting to believe the promise of what Bitcoin brings can actually be fulfilled. If the speed of the rising prices is a little scary, well this has happened before – during the dot-com crash of 2000.
During that time, some early stocks got hyped by the media and skyrocketed before they even had a viable product or revenue stream. While some stayed in their sky-high ordbit and have become companies we rely on so much today.
Here is a worthwhile comparison between a solid dot-com of that time and the recent Bitcoin price movements. Consider the following charts showing Amazon (AMZN) shares price movement from 1997 to 1999 (blue graph) alongside Bitcoin from 2016 to 2017 (orange graph); Bitcoin’s closest rival Ethereum (red graph) and Bitcoin from 2009 to 2010 (green chart).
It was tough work for early investors to accurately quantify Amazons value at first. The idea of using supply-chain management software to run a virtual book warehouse & factory outlet on a single website wasn’t the easiest to analyze at the time.
Then even by the start of ’97 – when most knew Amazon had a great idea and working product – very few were fully comprehending how much its shares should be worth.
Investors guessing at the company’s value, at some points seemed to overestimate its value before price fell consolidated before continuing to rise. These overestimations were only of the perceived market value at the time, as Amazon rose more than 6000% during the first two years after its IPO, any investors that held through price drops and had a long-term strategy have been rewarded much, much more over the following 18 years.
If you had invested just $1000 in Amazon’s IPO that investment would have been worth $665,840 by close May 12, 2017.
Surprisingly, Bitcoin’s performance over the first two years only achieved approximately two-thirds of Amazon’s original bullish run-up. The most recent price bull run of Bitcoin over the last two years and that of Ethereum since its ICO have both made dramatic gains, but have not yet matched Amazon’s famous meteoric rise.
It seems certain that cryptocurrencies are not only here to stay, but will continue to provide a life changing investment opportunity for all of us. If so, Bitcoin offers a multi-decade investment opportunity with a growing market cap and price that defies regular logic.
If you do decide to invest in Bitcoin, please be sure to keep your Bitcoin in a wallet that allows you control of your private key.
The following two wallets are considered the best and most secure Bitcoin wallets available…
- The best free secure wallet Blockchain.info on Desktop Browser, iOS & Android (BTC only)
- The best max-security hardware wallet Ledger Nano S (Hold BTC, ETH, ETC, LTC & many more)
Article written by Stephen @ Dapp.Tech, June 23rd, 2017
Quote reference: Investopedia.com, “Bitcoin Looks a Lot Like an Early Amazon” in Investopedia, June 21, 2017, http://www.investopedia.com/news/bitcoin-looks-lot-early-amazon/.