Bitcoin: Supply & Demand

This is a thinking exercise in calculating Risk/Reward.
As of this moment, Bitcoin is valued at $44,600.

It’s down from it’s All-Time high of ~$68K, but $44K is still a significant amount for something you can’t touch, feel, or even comprehend. I mean, this started at $0, only 13 years ago.

We know that there can never be more than 21M Bitcoin ever mined.

In fact, one can argue it is well below 21M and shrinking!
1M is locked up in the mysterious creator, Satoshi Nakamoto’s, account.
There are umpteen stories of early adopters who had hundreds of thousands stored in hard drives and lost it. Individuals lose their keys everyday. Without the keys, it’s virtually destroyed.

So with the Supply side fixed (or shrinking), what about the Demand side?

Consider the following:
Microstrategy bought and keeps buying more. Other corporations have followed suit, like Square (now Block), Tesla, and more. KPMG just announced that they are adding Bitcoin to their balance sheet.
→ The odds of more companies adding Bitcoin to their balance sheet FAR outweighs the odds of the early companies selling. As more money enters the market, the price stabilizes. As the price stabilizes, more money can enter the market. DEMAND from corporate balance sheets will go UP.

Microstrategy bought and keeps buying more. Other corporations have followed suit, like Square (now Block), Tesla, and more. KPMG just announced that they are adding Bitcoin to their balance sheet.
→ The odds of more companies adding Bitcoin to their balance sheet FAR outweighs the odds of the early companies selling. As more money enters the market, the price stabilizes. As the price stabilizes, more money can enter the market. DEMAND from corporate balance sheets will go UP.

El Salvador has declared Bitcoin legal tender. There is rumor of another South American company following suit. India has stepped back from the position of banning Bitcoin outright, and is looking at how to regulate it. Russia recently announced they are looking to regulate, and even mine Bitcoin themselves with excess energy. Seemingly, every week we hear of a US politician expressing their support of Bitcoin. Even the IMF, who condemned El Salvador’s move, recently invited Strike’s CEO, Jack Maller, to speak with them to educate them on Bitcoin and the Lightening Network.
→ The odds of more countries removing their skepticism/banning of Bitcoin to support and regulation FAR outweighs the odds of banning it. As more regulation is accepted, the more participants feel comfort in participating. DEMAND from country citizenry will go UP.

USA surpassed $30 trillion in debt. The money printer continues to go brrrrr. Do you think that is ever stopping? When looking at the value of Bitcoin in USD, if that flood of USD supply keeps going while the supply of Bitcoin shrinks, where does that tilt the balance of the BTC:USD ratio?

Bitcoin’s market cap is ~$846B. Gold is at ~$10T.
As a store of value, ask anyone under 30, which store of value do they prefer?

I am NOT saying go put your life savings into Bitcoin.

One of the biggest mis-conceptions: “I can’t afford a Bitcoin”
Bitcoin is divisible into Satoshis (Sats). A Satoshi is one hundred millionth of a single bitcoin (0.00000001 BTC).

I’m constantly “Stacking Sats”. $50 here, $100 there.
Once every couple of weeks. Seems like a good risk/reward trade off for a small percentage of my savings.

I still think it’s pretty early.
What do y’all think?

Time to Start Paying Attention to Bitcoin again?

Bitcoin news has been quiet for a while, huh?

Now could be a time to start sneaking in (do it, NOT to make money, but to EDUCATE yourself).

Last year, May 5, 2017, I wrote this blog post. At that time, Bitcoin (BTC) was $1545 and Ethereum (ETH) was $95. Even after the insane run up and subsequent crash, today’s prices are BTC = ~$8100 and ETH = $466.

BTC has shown nice price support and has shot out of a Head-and-Shoulder chart pattern. H&S is a typical pattern found at major turning points (according to classical chartist, Peter Brandt).

ETH is forming an Ascending Triangle pattern. I love this pattern because it provides a nice risk-reward setup. Buy up to $480, sell if it drops below ~$450.

Look, I’ve written this from a trade/investment perspective, but going back to my article, “The best thing you can do is educate yourself”.  

Open a Coinbase acct, buy $10 worth, get your own wallet, and move the coins around.

See what it feels like to hold digital currency. It’s a little scary, if I’m honest, but I’ve learned a lot and it’s tempered my excitement about decentralized cryptos for the masses (at least for western civilization).

If you really want to roll the dice, look at 0x coin. 🙂

Hold Hold Hold … It’s So Hard Not to Sell

BitCoin and Ethereum (as well as other cryptocurrencies) are on a parabolic trajectory. It’s so hard not to sell here. I mean, when you’ve 3x and 6x your investment and you see this trajectory, isn’t it prudent to take some winnings off the table?

I would say normally, taking some off the table (at least lock in the initial investment so that what’s left is “house” money). But here is my investor greed setting in, perhaps.

I truly believe that this is really only the very very beginning and HUGE gains are ahead because the blockchain technology is that revolutionary. I don’t want to get into the mindset of trading in and out because the Fear Of Missing Out (FOMO) if I sell will kill me more.

I don’t have a huge portion of my portfolio allocated into these, so I can afford to lose it all and still sleep at night. These really are like lottery tickets, but I like the odds here.

I’m considering diversifying and buying into some Ripple. I’ve been reading that Tezos is also an ICO to watch for. These aren’t as simple to buy, though. I mean, they aren’t hard, but I’d have to set up other wallets.

Interesting times…

The Blockchain is Happening. You Should Start Paying Attention

Go buy some Bitcoin. This is investment advice that I guarantee you cannot lose on. Not because Bitcoin can’t go to $0; it absolutely can. You cannot lose because it is an investment into your education. You can “invest” as little as $1.

What you’re doing when you purchase some Bitcoin is you’re educating yourself on digital currency. You learn how to buy, where to buy, how to store it in a digital wallet and how to transfer it. This is the future. The future may not be Bitcoin specifically, but it will be some form of digital currency based on Blockchain technology.

The Blockchain is the genius behind Bitcoin. The Blockchain is going to transform/disrupt/revolutionize a whole host of industries. You should learn about it. Here are two starting points from Forbes and Fortune.

“The first generation of the digital revolution brought us the Internet of information. The second generation — powered by blockchain technology — is bringing us the Internet of value: a new platform to reshape the world of business and transform the old order of human affairs for the better.” — Don Tapscott

Yes, there is a chance if you buy Bitcoin and it takes off, you could do well. Bitcoin’s total market cap is ~$25B now. According to Visual Capitalists, there is ~$5T in cash worldwide. Bitcoin is an alternative to cash, so you see the upside potential. We’re still at the very beginning. One newsletter I read made the analogy to think about Bitcoin as a share in the Blockchain; you’re owning/investing in a piece of the Blockchain.

Something is going on with digital currencies these days. I’m not sure what but every cryptocurrency is screaming higher. 100%+, 500%+, 1000%+ … these are 6 month returns on some cryptos. Don’t bet the farm though, you’ll never sleep with the volatility. These are what some may call “Widow Makers”.

In any case, I don’t want to dwell on the monetary aspect. The point is that I recommend learning about cryptocurrencies and specifically the Blockchain. All the banks are looking at it. Alliances and Consortiums are forming. Banks that don’t figure out a Blockchain strategy will be left behind.

The best thing you can do is educate yourself; invest in yourself. Learn about the Blockchain. It’s coming. Buy some Bitcoin.


Is Ripple Another Cryptocurrency Worth a Small Bet?

Ripple is the 3rd largest cryptocurrency by market cap. It is run by a company, so it has an overlord; this is a good and bad thing.

Basically, Ripple is focused on the market of forex and it has partnered with several major global institutions. The major, major advantage to Ripple, as I understand it, is the speed at which transactions can happen and be confirmed; it’s seconds. This is in contrast to Bitcoin, whose blocks take ~10 mins on average.

Also, Ripple doesn’t depend on energy-intensive mining process. Instead it distributes XRP tokens at its discretion in order to incentivize certain behaviors.

“We will engage in distribution strategies that we expect will result in a stable and strengthening XRP exchange rate against other currencies. To this end, we currently plan to distribute XRP primarily through business development deals, incentives to liquidity providers who offer tighter spreads for payments, and selling XRP to institutional buyers interested in investing in XRP.”

Overlord can be good, but can be bad as well. Do we trust in this “Central Banker”?

Here is a recent chart of Ripple’s XRP courtesy of

I’ll be watching the transaction volume over the next few weeks. If traffic continues to be steadily increasing, then it will definitely be worth a flyer.

It seems to be a good strategy to just put a small amount of money into these cryptocurrencies early and just sit on them. I’m pretty sure ONE of them will emerge as a HUGE HUGE winner. This is playing the VC game…

Here’s how one would buy Ripple XRP (in US):

Bitcoin Hits All-Time High Today … Ethereum Ether Token Hits All-Time High Today Too

I bought my first bitcoin in November 2013, yes on that rapid ascension up. That was during the whole Cypress debacle. You can see the how bitcoin subsequently came back down to reality. Over the past 3+ years, bitcoin has formed a beautiful cup base. I believe in the long term story of bitcoin and the blockchain, so rather than trying to trade bitcoin, I just bought a set amount each month throughout most of 2015 and into 2016.

In 2016, Bitcoin was by far my best asset performer, going up over 300%. But this is a LLLLLOOOOOOOONNNNNNGGGGG term play for me.

I will write much more about bitcoin and the blockchain in the future. This is the first high in many to come, I’m certain.

Ethereum’s ether token (I think that’s what they call it). This is Bitcoin’s cousin. I took a flyer on some tokens in March, getting in around $19 after I read this article about how JPMorgan, Microsoft, Intel and 30 or so others formed and alliance to create a standard version of the Ethereum software.

I’d previously read about how early Bitcoin buyers were now millionaires. With the backing of these corporate giants, maybe something will come from Ethereum. Who knows; I’m treating it like a lottery ticket. It’s a 3-bagger already (but again, not getting overly excited because it’s a long term play).