[2017-10-13] 3 Reasons To Buy Bitcoin Near Its $5856 High

[White sugar]

You may be hesitant to buy Bitcoin (COIN) near a $5856 high after it had a blistering year. There are three good reasons to do so anyway. Crackdowns on ICOs are helping Bitcoin. If Bitcoin becomes a reserve currency it can still turn into a hundredbagger from here and IMF research suggests leading cryptocurrencies are the best bet to reach the tipping point where currency adoption progresses in exponential fashion.

Crackdowns are good for Bitcoin

The chart below shows Bitcoin's share as the total market of all cryptocurrencies. You can clearly see how it was falling rapidly until the China crackdown. After that, the trend reversed and Bitcoin became a safe haven of sorts. I've written about this potential effect in China Creates Bitcoin Buying Opportunity.

It is only natural to shrink as it started out as the sole Cryptocurrency and viable alternatives have entered the market over time. Some will likely take more share over time. However in the short term it makes sense Bitcoin will regain some of its former dominance at least against the "Other" category.

China is effectively putting a stop on future competition. Something which in my opinion only accelerates a process that would take place anyway; that of the market getting rid of the bad apples and incorporated for profit endeavours only being able to raise money through lawful means.

Value in the early stages

It's true that Bitcoin went on a tear in 2017. I'll be the first to admit it could go to zero if it doesn't work out. However, I'm not in it to sell it to a greater fool but to see it become something like an independent reserve currency to the world. Currently, the U.S. dollar is the reserve currency of the world and the M2 money supply illustrates how much value it represents. Bitcoin could come to represent a similar amount. Because there can never be more than 21 million Bitcoin the unavoidable consequence of Bitcoin becoming a reserve currency is for each unit to represent a much greater value. As the chart below demonstrates at its current value of $5672 it could still become a hundred bagger.

https://seekingalpha.com/article/4113387-3-reasons-buy-bitcoin-near-5856-high

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[Carlton Banks]

You may be hesitant to buy Bitcoin (COIN) near a $5856 high after it had a blistering year.

[snip]

However, I'm not in it to sell it to a greater fool but to see it become something like an independent reserve currency to the world.

Ok then Seeking Alpha (which I understand to be part of the FT media umbrella), but if you buy COIN, you're not buying any form of currency at all, let alone an independent reserve currency. COIN is the ticker symbol for DCG's investment fund, and you're receiving dollar denominated dividends from something like that.