Is Bitcoin Worth Investing in 2020? Here’s My Quick Thoughts
21 November 2020
Bitcoin can be considered the world’s best-known cryptocurrency.
Today is the 21st of November, 2020 and coincidentally, Bitcoin supply is also capped at 21 million.
Bitcoin recently went above $17,000 and is now more than four times its price back in March 2020 when it was below $4,000. In fact, as of the time of this writing, Bitcoin’s price is nearing $19,000.
At its essence, Bitcoin is a computer file that can be stored in what we call a ‘digital wallet’ in our smartphone or computer.
It was created back in 2009.
Every single transaction is recorded in a public list called “blockchain”.
As of now, Bitcoin is not illegal in many countries around the world.
Why Do People Invest in Bitcoin
Bitcoin supply is limited at 21 mn.
And the view is that due to its scarcity, there will be an innate value to it.
Which can potentially be a shield to inflation – and an alternative to gold.
So the narrative today, is that Bitcoin could be an inflation hedge.
This could potentially be a sign of more mainstream acceptance of Bitcoin in the future.
One of the advantages of cryptocurrencies is the fact that they can be more efficient to transfer than using money.
And with cryptocurrency, there will be no need for involvement from third parties such as banks and there is also no regulatory oversight by governments.
Hence, future potential more mainstream acceptance of Bitcoin, potential hedge to inflation (alternatives to Gold), and the efficiency of the system are a few of the bull cases surrounding investing in Bitcoin in 2020.
But What Are Some of The Concerns To Investing in Bitcoin For Me?
Series of cyber hacks like in 2019 where $32 mn was stolen from Tokyo cryptocurrency exchange are one of the concerns surrounding the security of some exchanges to hacks.
I acknowledge that Bitcoin is limited in supply at 21 million.
A question that I have in mind is: If something is limited in supply – does that always mean that there is value to it?
The current value of Bitcoin comes from demand.
Right now, Bitcoin has plenty of demand worldwide – and they have been having good demand for a number of years now.
However, will the demand sustain even after all 21 mn of Bitcoin are mined?
That is the golden question for me.
Because as with anything in this world, for example, a limited supply of painting can be valuable or not – does not simply come from the fact that they are limited in supply, they have to have the longevity and sustainable demand aspect into it as well.
And for me, right now my certainty that Bitcoin hype will persist say 5 to 10 years down the road is still a question mark.
The information provided is for educational and general information purposes only and is not intended to be personalized investment or financial advice. We make no promises as to the accuracy or usefulness of the information we present.
Important: Please read our full disclaimer.
Like It? Share It!
Appreciate it if you’ll take one minute to share it on Facebook.
Pay it forward, so more people can benefit 🙂
Chris Lee Susanto
Founder of the value investing blog Re-ThinkWealth.com (if you type “value investing blog” in Google, his blog is likely the first one).
Chris is a big proponent of business-like stock investing. He invests in companies where there is value to be found, be it a turnaround, depressed, value, or quality growth company (compounders). He either buys the stock outright or he profits through selling put or selling call options – or buying call options (buying and selling options are especially dangerous for those who do not know how to properly execute it).
Some of the places where Chris has been invited to speak or have added value as a mentor or writer includes Singapore Polytechnic, SMU Institute of Innovation and Entrepreneurship (IIE), Dollars and Sense, The New Savvy, Value Walk Blog, Investment Moats, NUS Tembusu College, NUS Investment Society, CGS-CIMB Singapore and Internationally in Myanmar.
Being a full-time investor himself, Chris knows that he did not beat the S&P 500 return so far (as of the time of this writing) by listening to stock tips. So, when he teaches, he also doesn’t believe in giving stock tips as it is not sustainable for you in the long run. As of the time of this writing, he is still open to new application in his Value Investing Mentorship™ Club. Feel free to also join his free investment telegram channel here.
More from Chris
For stock investors, I am a firm believer in having an optimized routine that supports us emotionally and rationally – so we can hopefully […]
2020 has been another great year for my portfolio. My portfolio is up around 81.24% for the year compared to the S&P 500 total […]
20. Does Warren Buffett Invest In Options? Yes, But It’s Not What You Think Most people will not associate The Oracle of Omaha […]
Options, Weapon of Mass Destruction? Most people will not associate The Oracle of Omaha with options. Because after all, options are […]
I have been wanting to buy the Oculus Quest for the longest time. A few years ago, when Oculus first came out with The Oculus Quest, I wanted to […]
Based on the current trend of the mail-in ballots, it seems likely that Biden is going to be the victor of the US election in
Netflix currently has more than 65 million U.S. subscribers and about 195 million paid […] Their last hike for the U.S. price was in January 2019.
Being an avid follower of many investment and finance blogs or websites in Singapore, I thought why not I create an
1. Long-Term Challenge With Media Division The first thing that comes to mind when we hear SPH is the newspaper. And newspaper makes money through […]
There are many value investing lessons that I have learned throughout these past five, six years. For today, I thought to share with you eight of the value investing lessons […]
Elon Musk is a fantastic marketer and an innovative entrepreneur. I have been curious about the Tesla story for quite some time. And here are my five key takeaway from Tesla 2020 […]
Snowflake does cloud computing that implements a variable pricing model, which can be at times more attractive than fixed packages […]