The crypto market is a market of strong believers highly influenced by early 2011-2013 influencers, strong believers and developers, many of which have made big fortunes along the way. Watch Simon Dixons channel on youtube to see who those influencers are. I mention Simon as he is one of those young brilliant influencers who was an early BTC investor who ‘held on’, yet remains very respectful in relation to these highly uncertain times and who also recognizes the need for diversification into the traditional hard asset classes.
Bitcoin is simply too slow to ever use as a ‘regular’ means of payment
On Thursday October 1st at around midday, a client tranferred a few bitcoins between accounts on two different major exchanges. A small 0,05BTC test transfer followed by larger transfers.
The transfers were all shown as being processed on the receiving exchange’s account of the client.
It wasn’t until the monring of Saturday October 3 that the transactions have been approved by miners with some 80 confirmation.
It then took until October 4 and 5 to actually see the credit in the receiving account.
And this is a the problem. The system can be too slow for comfort where we can now use existing from both traditional banks and new digital banks to make payment and receive confirmations in a split second.
The client’s reaction to eleminate all BTC from the portfolio was completely understandable and it was decided to immediately sell the entire balance at $10,800 and moved in gold.
We have been involved in BTC to a small extend with many small transfers in the past, but never this kind of bizarre experience of extremely slow transaction confirmations from the blockchain.
One only needs a single bad experience to abandon that space and this is exactly how we feel.
Something else in the digital currency space will need to replace BTC and many other crypto currencies to fill the gap that we think may widen and limit exposure to banks, protecting one’s cash assets.
As most traditional payment providers are getting involved in developing a digital currency system for their retail and wholesale clients, just like ECB and other central banks are already signalling, a lot will change in coming years.
Our one time experience early October was our signal that the 10 year expansion of digi currencies may be ending and replaced by a completely new and completely controlled system by world monetary authorities.
A good enough reason to not ever invest in an asset that is only being supported by a limited size group of young opportunists and influencers drawing too many inexperienced followers into their conviction.
The investment returns were extreme for newcomers during the very short period for early adopters and more maturity in 2012 to say the middle of 2017 as BTC rose into the stratosphere upward to $3,000.
Since then people have still made but also lost substantially especially as hyperbolic momentum disappeared when price crossed over $10,000. During the past 3 years Bitcoin traded above 10,000 for just 8 out of the 24 months whilst dropping well below $5,000 during 7 of those 24 months.
A matter of risk awareness and not being greedy. Better to stay out unless you need that high risk killing experience with a chance of losing everything.