- 3 Reasons I Remain Long-term Bullish on BTC
This marks the inaugural post of the ‘Three Reasons’ series. The posts will alternate – a bullish outlook for a particular blockchain project followed by a bearish. Three is an estimate of convenience only. These posts are intended to be brief expressions of my opinion on particular cryptocurrencies and are not exhaustive in detail.
Every recommendation is longterm ie returns are only expected after a multi-year investment.
These are entirely subjective observations. Do your own research and reflect on your own circumstances and realistic tolerance for risk.
Do your own research is not a slogan – if you are at all unclear as to what conducting your own research involves please read the following posts.
Crypto is in an Established Bear Market Cycle
Any and all short-term investments in crypto are more likely to lose value than not.
For BTC 1k is entirely possible.
Explanation of time frames
Short-term – any investment horizon under a year
Long-term 2 to 10 years and beyond (for simplicity medium-term investment horizon is rolled into long-term)
3 Reasons I Remain Long-term Bullish on BTC
The 2020 Halvening
In May 2020 the block reward for BTC will go from 12.5 BTC per block to 6.25 effectively halving the rate of inflation and new coin supply. In the months before and after this drop in supply creation, it is highly likely that buying interest in securing this ever rarer asset will increase.
The Lightning Network
LN in its many iterations is quickly approaching market deployment and is likely to be ready for prime time by mid-2020. The old hoary ‘but you can’t a coffee with BTC’, is about to become an objection of the past. Instant transactions coupled with ultra-low fees and the market brand of Bitcoin bodes very well for price appreciation.
Institutional Money Inflows
At some point the unicorn will leave the forest, institutional money will start to meaningfully penetrate the market and the lion’s share of this capital inflow will most likely find its way into Bitcoin. The staggering amounts of money that could make its way into the crypto space may prompt a substantial price appreciation. Regulatory clarity is still lacking but bit by bit, progress is being made with many jurisdictions such as Japan and Korea making steady progress in regulatory framing. It seems reasonable to assume that by 2020 at least some of the world’s major economies will have established a regulatory framework that will encourage institutional entry into the space.
Global Markets are Overdue a Correction
The Good Times have overstayed their welcome. In the simplest possible terms, we are overdue a recession. 2020-2021 seems a high probability call for a global recession. Short-term this will drive down the price of BTC as it will still be considered a high-risk asset but if the recession proves deep a hedge into crypto will become increasingly attractive to those looking to park massive amounts of capital with a possibility of return – somewhere. In crypto terms that somewhere will most likely be BTC.
DOW Jones since 2000 (monthly chart – grey indicates a recession)
Other Long-term Positives
SEC clarity that BTC is not a security.
Network depth and longevity.
Truly decentralised no single point of failure (in stark contrast to most rivals).
Network security unparalleled relative to other cryptos.
Large, experienced and talented developer pool.
Mass-market awareness comparative to all other cryptos.
Early struggles for identity-purpose largely settled.
At a later date, I’ll discuss these price supportive fundamentals in some depth.
There you have it – 3ish reasons I remain long-term bullish on Bitcoin. As always looking forward to your comments, reflections, and critiques.