So you have been hearing the words Bitcoin and Crypto for a while now. If you still have no idea what it means and have tried reading up on it but don’t know where to start, let me help you. To start, you need to understand what Bitcoin is. Remember, there is Bitcoin, and then there is everything else. To do that, you can try this online course by Bitcoin Magazine. I recommend doing one lesson a day, not to get overwhelmed.
Why Invest In Cryptocurrencies?
Here is my opinion on why Bitcoin will be worth $1 million in the future (worth around $40,000 at the time of writing).
1 – Limited Supply
There is a limited amount of Bitcoin, and there will never be any more. The number is 21m. There will be around 10 billion people in the world by 2050. That is less than 30 years away.
Out of the 21m Bitcoin, 1m is held by Satoshi, the unknown founder of Bitcoin, 5m has been lost, another 1m has been stolen, 5m is held by whales who never sell, and 1m is not yet minted. So, that leaves us with only 8m free Bitcoin in circulation right now. There are over 56 million millionaires in the world (that’s confirmed millionaires – there are many more unconfirmed millionaires), and there are even more potential Bitcoin investors. So, make your own decisions about the supply and demand of Bitcoin.
2 – Institutional Recognition
Family Offices and Hedge Funds are starting to invest in Bitcoin. Many of the top funds have already invested between 2% and 10% of their portfolios in Bitcoin. So, what do you think will happen when these top funds decide to increase their holdings from 2% to 50%? Remember, there is only 8 million Bitcoin in free circulation. This number will decrease when the whales buy more Bitcoin and never sell. What percentage of their portfolio will be in Bitcoin in 2 years? What about 5? 10?
3 – Store of Value
Robert Kiyosaki, the author of “Rich Dad, Poor Dad” and businessman with a net worth of $100m, has always advocated investing in gold, silver, and property as a store of value. He has now started talking about Bitcoin and Digital Gold. You can DYOR (do your own research) regarding this more.
4 – Anti-Inflation Hedge
Bitcoin is an anti-inflation hedge. If you compare all of your assets to Bitcoin instead of dollars, let me promise you, they all depreciated. Let’s say you bought a house 5 years ago for 250,000 USD (March 2017), then that was 250 Bitcoin. You bought it in a nice neighbourhood. They opened a WholeFoods nearby, and they built a Crossrail stop next to your house. Now you can get to London in just 30 minutes. Your home has gone up 100% in price. Great return. It’s now worth 500,000 USD. Want to sell it in Bitcoin? That will be 12.5 BTC. 250 BTC vs 12.5 BTC in five years. House prices in Allepo held up better.
Countries like Luxembourg and jurisdictions like Dubai are planning to open BTC banks. They are not doing it for the Bitcoin price of 40,000. They’re doing it because, once the price hits the millions, the UHNWI (which will be you if you follow through after this article) might not want to keep their flash drive under their pillow.
4 – S2F (Stock to Flow)
This is a whole article in its own right. Well, probably I can expand on every point here with 10,000 words. Anyway, I recommend you do your own research on this topic. Here is an article to make it easier: Stock 2 Flow.
5 – Halving
This is another article in its own right. You can do your own research or go back to the article I provided at the top. I’ll put it this way, though. The next Bitcoin is projected to happen in March 2024. You have two years to accumulate as much Bitcoin as you can before then.
6 – Bitcoin ETFs
The SEC has finally allowed Bitcoin ETFs. This means that they allowed funds to trade and invest into Bitcoin, themselves and on your behalf. This is the next step to mass adoption. When the mass media starts promoting it, it will fly. Soon more ETFs will be issued, and more companies will get licenses. ProShares, VanEck, and Valkiry all have them now. And this is just in the US also. Remember, we are just at the start. Only 100-200 million people have Bitcoin, out of 8 billion people worldwide. It is still early.
7 – Increased Wealth
Let me finally move away from Bitcoin and on to crypto. As I mentioned before, there is Bitcoin, and there is everything else. It’s a huge industry and it changes daily. We are still the early adopters. So let me tell you about something called $1 country.
In the 1990s, there was a statistic about people living in extreme poverty. Extreme poverty was classified as living on less than $1 a day in income. Hence the catchy phrase. Even though the world has changed and people earn more, the cost of living has changed. This means that the only difference for people living in extreme poverty is how the world classifies extreme poverty.
In 2021 an estimated 698 million people, or 9% of the global population, were living in extreme poverty. That is, living on less than $1.90 a day. Over one-fifth of the global population live below the higher $3.20 poverty line (1,803 million people). Over two-fifths (3,293 million people) live below $5.50 a day.
The world average GNI is around $30 per day. The top countries very much distort that. For example, the GNI in Switzerland is $225 a day, in Ireland and in the US, it’s around $180 per day, and in Finland, it’s $140 per day. If we move to the bottom of the list, people in countries like Somalia and Burundi have a GNI of less than $1 a day. In Niger, it’s $1.50; in Sudan, it’s $1.80; in Pakistan, it’s $3.50; and in both India and Nigeria, it’s under $5.50. Anyway, you get the point. Don’t forget – it’s the wealthiest 10% of people in the world that hold 90% of the money in the world. In the countries mentioned above, it is probably 1%. So those statistics are hugely distorted.
And to simply if even further: seven-in-ten people globally live on $10 or less per day.
So what does this have to do with cryptocurrencies? Well, that’s where it changes everything. With Play 2 Earn games, you can earn more than that. On Axie Infinity, you can easily earn $5-$10 by investing a couple of hours a day into it. That might not sound like much to you or me, but it is life-changing for 7/10 people in the world. That is around 5.5 billion people. When you become knowledgeable in the game you play (like in life, the more experience you get, the more money you earn), you can earn around $50 a day. I know this from a personal experience as a friend of mine is earning this much. Now, that makes it around $18,000 GNI, which puts you in line with countries like Portugal, Lithuania, Slovakia, Greece and Latvia, and above countries like Hungary, Poland and Croatia.
8 – Legal Tender
Countries are starting to make Bitcoin a legal tender and legalising the crypto industry. El Salvador has made Bitcoin legal tender with many other countries looking into it – including Malaysia, South Africa, Brazil and other South American countries. So if countries are making it legal tender and are investing in it, what are you waiting for? What other confirmations do you need?
9 – Market Cap
The bitcoin market cap is only $1 trillion, and the whole crypto sector is only around $2 trillion. For comparison, Apple is $3 trillion; gold is $12 trillion; the world fund market is $100 trillion. The only way is up.
I think this is a good place to stop. Are 9 reasons are enough? I can give you many more. If this hasn’t convinced you, though, maybe Bitcoin and crypto are not for you. You see, investing has a lot to do with psychology. Many people buy because of FOMO and then sell when the market corrects, making a loss. If you don’t believe in an asset you are investing in, you probably shouldn’t do it. You need conviction to ride out the hard times when you bought it at 20k, and it temporarily drops to 3k. It’s the same as investing in a stock of a company. You need to believe in it and the market sector. I am not investing in the written press, which doesn’t have an online presence. I am not investing in Blockbuster, VHS tapes, Polaroid cameras, etc. I am investing in what I believe is the future. So if you still think it’s a bubble, and I haven’t convinced you, let’s shake hands and go our separate ways.
Actually, let me make one last throw of the dice:
10 – Investment Trends
Life and investing are all about trends. What is the next big trend going to be? In 2021, a top 10 technology company changed their name to Meta. It was Facebook. Maybe you heard of them? That’s because that’s where they see the world going – into the Metaverse. Forget Facebook and Instagram and all that now. It’s Meta. That’s their vision and outlook for the future. In 50 years, they think everyone will live online – in a Metaverse. You have to understand where the world is going. The world’s top minds believe that’s the future. You can agree or disagree. You need to decide if you are getting on board or if you will be left behind. 20 years ago, the internet was something new. Now we are moving into Web 3.0
Okay, that’s it then. Not convinced? That’s goodbye from me then. Take care.
How To Invest In Cryptocurrencies
For those who are still here. I will now move on to the main topic – investing in cryptocurrencies. The important thing to remember is that investing is not the same as trading. Once you invest, be ready to keep your money there for the next 2, 3, 5 or 10 years. Once you invest, the price could go down, and you might feel like selling. You have to take emotions out of it and see every drop and correction as an opportunity to buy more. That’s why you have to believe in what you are investing in. Otherwise, it won’t work, and you will take a loss at every bump in the road. Treat it like a business; if you make a loss in your first month, you are not going to shut your whole business down, are you? Be ready to invest and forget about it. Don’t buy Bitcoin at $40k and sell it at $35k. Believe it will reach $1 million.
So let us move to some investment strategies. Let me tell you – I am a big believer in Bitcoin (if you haven’t realised already). I believe it will change the world and how the financial system works, give millions of people access to banking, and take millions more people out of poverty. Now, since I am a financial expert and this is my job, I also invest in other cryptocurrencies—those with the potential to make bigger gains. Eventually, I take my profits from those investments and transfer them to Bitcoin (Store of Value). I keep no fiat currencies myself anymore. I do, however, trade over 20m on the foreign exchange market for clients. And when I take my performance fee, I also put that into Bitcoin. A lot of my clients do the same.
1 – Stack Sats
I will go from the most conservative strategies to more risky ones:
Strategy 1 is “Stack Sats”. This is the easiest for newcomers to master. In my opinion, it’s also the best option if you are not a professional investor. Some of the best things in the world are the best because they are simple. So, as mentioned before, don’t get dragged into trading. If you believe Bitcoin will be worth $1 million one day, you won’t care if you bought it at 36k, 40k, or 60k. Take an amount you are comfortable with every month and buy Bitcoin. That’s it. Take 20-30% of your salary every month and buy Bitcoin. If you have any money left over at the end of the month, buy more Bitcoin. If you feel like buying something new that you don’t need, buy Bitcoin instead. If you earn $5k a month, take $1k, and put it into Bitcoin as soon as you get your salary. Then you have $4k left to live on and play around with. You can purchase more Bitcoin throughout the month and buy dips.
Here is a calculator that you can play around with to see how much money you could have made using this strategy: Calculate your investment.
I have taken the liberty to calculate it based on you earning $1,000 and putting 20% into Bitcoin starting five years ago in March 2017. You would have invested $12,313.89 and now would have had $82,576.62. That’s $70.3k as profit with a 571% ROI and an annual average ROI of 113%. If you were investing more and buying dips, you could have done even better. You can play with the calculator yourself and based on your income. It’s quite fun.
2 – Alternative Strategies
On option is 50/25/25. This is when you buy 50% Bitcoin, 25% Ethereum and 25% BNB (Binance coin) and keep adding every month. Another option is 40/10/50 – 40% BTC, 10% Ethereum and 50% altcoins. For Alts, look at the top 10, maximum top 20 and pick projects you like. Invest in them, add to them every month, and look for new coins to add to your project.
3 – Trends
This is what I spoke about before, Facebook becoming Meta, Metaverse projects, NFT projects, Play 2 Earn projects. Study the trends, think about the next one, and look for the top projects to invest in that sector. I am looking at Play 2 Education now, which you can’t easily find by searching the internet. It is a new sector which I think will explode. Find projects and sectors that are on-trend. How to pick a good project? Look at their founder, their team, and their product. Check their Twitter and telegram and see how many people follow them. It will all come with experience.
4 – Token Sales – IDO / ICO / Lauchpad.
This is an article on its own. Something I will get to in the future. Right now, if you are interested, have a look online at those things. Keep in mind that a lot of them require serious investments. They also require a lot of time and experience when it comes to investing, or you may fall for some scams and lose your money.
Okay, I think I will stop here, as I think even Token Sales are going over a lot of people’s heads now and require an article of their own, which we will do in the future. If you are interested in that and knew everything before that I was writing, then why have you read so much of this introduction article already?
I just started writing up more things like mining, staking, farming, liquidity pools, more and more. I think I need to stop here though.
“Denis, I heard you can make money in crypto with no investment whatsoever or minimal investment. Is this true?” Yes and no. You can make money from crypto without investing money. You will still need to invest your time, though. How? That is for another day and another article.
Following articles: “How to make money in crypto with $0 initial investment” and “How to maximise profits in crypto if I have less than $1,000.” Check out our blog for more articles about investing. Subscribe to our telegram group for free – a special offer for today only – for market news and for up to ten free trading signals every day!