The world has woken up to the fact that
the Central Banks are a curse, rather than
a boom to the global economies, and their
time left is slowly coming to an end
because of new technologies and
currencies I talked about last week.
People are starting to park their money in
digital currencies, like Bitcoin, rather than
parking them in fiat currencies. This is
primarily due to the Negative Interest Rate
Policy as well as Zero Interest Rate Policy
of the Central Banks, which explains the
sharp rise in the price of Bitcoin, this year
as seen in the chart below.
Billionaire resource investor, Carlo Civelli,
believes that the Central Banks cannot get
away with all the monetary printing. And I
believe that the more they print, the more
they push investors away from wanting
their fiat currency.
“If we all talk about the end game and a
scenario of total collapse, I can see the
governments telling everybody that your
money is now worthless and the bonds
you own are now worthless. You all have
to take a haircut”, said Civelli.
The institutional investors are
recognizing this outcome,
hence, they are the largest group of
Bitcoin buyers.
Jeremy Millar, Founder and Managing
Partner at Ledger Partners in London,
believes that people at hedge funds and
family offices contribute 50% to 90% of the
Bitcoin’s current $6.4 billion market cap.
“What is clear though is that over the last
two years, bitcoin has emerged from its
‘hacktivist’ origins to a more
institutionalized ecosystem which
includes the participation of hedge funds,
traders, and professional investors,” said
Millar, reports Reuters.
Lack of regulation was scaring a few
customers; not that regulation helped in
any way during the 2007 crash, and
neither will it help in the next crash.
Nonetheless, the entry of the Winklevoss
twins has given the whole industry an
entrepreneurial boost. The twin brothers
have co-founded the Bitcoin exchange
“With Gemini, we’re a regulated trust
company in the state of New York; we’re
regulated under banking law, so we
operate and have the same controls and
procedures that you would expect of any
financial institution (like your bank). That
didn’t exist in the early days of Bitcoin.
Quite frankly, it didn’t exist a year ago . .
. It was a Wild West in the early days,”
said Tyler Winklevoss .
It is not only the U.S. and the European
investors who are worried about their
currencies but the Chinese investors are
worried, as well, about the decreasing
value of the yuan.
Zennon Kapron, founder of Financial
Technology Consultancy Kapronasia and
author of a book on Bitcoin said, “it
seems that China is leading a lot of the
movement. People are protecting their
investments [by converting yuan into
bitcoin],” reports the Wall Street Journal.
The chart below shows the Chinese
appetite for Bitcoin. The two Chinese
exchanges, Huobi and OKCoin, both
witness approximately 92% of the global
trade in Bitcoin.
“There’s a lot of hot money in China that
has to go somewhere,” says Du Jin, Chief
Marketing Officer at Huobi, reports The
Austrian economist and investor Tuur
Demeester believes that “it is important to
use Bitcoin as part of a diversified
portfolio.” He adds that bitcoin “offers a
counterbalance to a series of growing
risks that are associated with traditional
investment practices,” reports the Brave
New Coin.
“We think a well-rounded portfolio
includes investments in a basket of block
chain technologies (altcoins), with an
emphasis on Bitcoin. This portfolio can
play a part in three distinct strategies:
as an insurance policy, as a hedge in a
broad speculative portfolio and as a
calculated bet on an early retirement,”
wrote Mr. Demeester, in his report.
He goes on to add that “we believe
returns of 100x over 10 years are
possible, though obviously not
My readers know that I do not big believer
in owning fiat currencies for the long-
term. My main emphasis is to find
‘alternative’ asset classes, which are
mature enough, but not saturated. The
risk-reward in such classes should be
Gold and silver are undeniably the best
investments for the long-term considering
the low-risk that they carry. Similarly,
within the next few days, I will keep an
eye on Bitcoins, as well, and suggest
trading ideas so as to profit from it.
Keep watching this space so as to know
when to buy each one of the ‘asset