(At the outset, a big thanks to the "Big T" whose original piece I shamelessly copied in part as I couldn't say it any better).
In May 2016, I first wrote about a fairly new "investment" asset called Bitcoin. At that time, most people called Bitcoin a “fraud,” a “scam,” or a “Ponzi scheme.” Many of you who have "followed" me in FB know that since 2016, I’ve been fighting a long battle to educate everyone about the value of Bitcoin. Then in late 2017, I met an American investment specialist, Mr. "LP" who not only shared my passion/vision but encouraged me to use my "accounting knowledge" to make sense of this new technology, for the benefit of the masses. He said I was the best partner he has ever teamed up with - and he is a Tony Robbins staffer. Together, we have traversed the world sharing our knowledge with people who "believed''. We have had a few converts too:).
Over that period of time, till as recent as this year, I’ve had my reputation rubbished… been maligned and ridiculed at times… and even received hate messages for my belief in Bitcoin, especially when I was an acclaimed accountant in Malaysia who's expected to be traditionally mind-set and not fall prey to "airy-fairy" stuff. I recall speaking with senior accountants and lawyers in town who all laughed at my "fool's gold" theory, they said. I spoke with bankers and regulators who told me that Crypto will never work or "we will ban it" in the worst case. One senior personal banker categorically told me that Bank Negara would ban crypto - not only was she dead wrong, the Regulators have indeed approved a few crypto exchanges in Malaysia and passed laws to regulate this business. Regulation is GOOD - it means, you can do something within the prescribed laws - thereby legitimising the industry. We no longer have to operate "underground". The old days of thinking that Bitcoin will be used by gun runners and drug dealers are gone - can you imagine a terrorist in a hole in Afghanistan, providing his 5 pieces of KYC (Know Your Client) documents (including his "address" LOL) and then keying in a 32 digit code without making a typo error...to order his Bazooka? (I'm disappointed that the mighty US Treasury boss Yellen is also somewhat ignorant about Fintech).
You see Folks, it's all about "CONTROL". The Blockchain, to a practically large extent, is uncontrollable...and authorities don't like it. I qualified this statement because I and maybe a few others, are aware of ways to "control" the network separately - that's a story for another day:)
Rather unfortunately, not many took the effort to read up on the new wave of Fintechs that were rolling into civilisation. Most people (mistakenly) thought that since Bitcoin was "created" from thin air, no "value" should be ascribed to it....they simply didn't understand how Bitcoin was mined and the costs involved (my estimate is that it costs between $ 4,500 to $ 6,000 to mine one Bitcoin over a one month period). You see, besides the hardware cost (about $3,000 per machine), the electricity consumption is about $2,000 depending on where you operate your "mine" - some countries like Iceland and Canada have indeed found a "new" source of income by encouraging miners to relocate their ops there - an expansion/generation of a business that was never there till about 2009 ? And the mining algorithms (to earn a Bitcoin) are getting more difficult to solve and hence, requiring super-duper computers (and hence the higher energy use) - there is an inbuilt price appreciation mechanism in the crypto network. If this all sounds gobblygook, fear not....just ask the smartest "person" in the world and he/she will give you all the answers :).........Google.
Some questioned the "use-ability" not knowing that there are more than 20,000 businesses globally (excluding China and India where there is opaqueness) that accept cryptos as a mode of payment. In the US, Dubai and several European countries, you can even buy properties and cars using cryptos. Some questioned the fungibility of currency that a single unit cost $58,000. Again, the lack of reading is culprit. Bitcoin is divisible into 100 million Satoshi: Simply put, 1/10,000 th of a BTC, has value. Can you imagine it's only a matter of time before inflation and economics will erase some zeroes from this fraction.
Against the naysayers, I've tutored a large group of "students" (of all ages/walks in/of life in Malaysia, Thailand, Singapore, HK, Taiwan, China and indeed the US) and this group, believed in the message: Many happy students now. Personally, 3 students have told me that they have become Ringgit millionaires in 2021....and these are normal folks who work very hard for their money. Some students paid off their credit card debts, renovated their houses, settled housing loans and one, saved his marriage that was strained by his finances before he discovered Crypto. One student just told me that, given his age, he has nothing to leave behind for his son but hopefully, ONE Bitcoin that will change his son's life in future. Another student told me that he has found financial independence in his 30's and never ever has to work again in his life. Stories like these, melt my heart. Now, their life(style) has changed completely: From driving a beat up Proton/Nissan to an imported Mercedes. Something that they would have NEVER imagined owning in their lifetime.....if they didn't believe in Fintech.
If you’re anything like me, you’ve probably been laughed at by your family and friends just for talking about the idea of Bitcoin. It’s been a tough journey for most of us. From the peak of the Jan 2018 Crypto Bull market to the depth of the Dec 2018 Crypto Winter…we kept faith. I believe if you could have faith in a future that’s different than the one the mainstream media is portraying… you’d see a day when institutional money would flow into Bitcoin. Last month, Tesla announced it was buying $1.5 bil worth of Bitcoin to keep on it's Balance Sheet. That asset is now worth $2.3 bil......the profit that Tesla made in this 1 month period was more than what it made in the past 18 years combined selling cars! Elon musk have (pardon the pun) flipped open his computer and pressed 3 keys perhaps (say taking 60 seconds?) to make $720 million........unbelievable ? Micro Strategy is another company that has seen it's stock price double in 3 months because of its investment in Bitcoin.
And those of you who stuck with us, I want you to congratulate yourselves. You can see the light now......
Not only was Bitcoin the best-performing asset class of 2020… it also obliterated its old highs. Bitcoin rose 308% in 2020 – and just recently was as high as $61,000. Here’s why I feel vindicated: Bitcoin is now the most valuable financial service/instrument in the world by market cap. This is something we’ve been predicting for years. When it fell from $20,000 in Jan 2018 to about $1,800 in Sept 2018, we told our students to "BUY". I recall telling my class, maybe, if you must, sell your house/condo and buy some BTC and keep. I said "In 5 to 10 years from now, it will be extremely rare to come across someone who owns ONE Bitcoin". It's now about RM 230,000 per BTC....how many can afford to buy just 1?
Today, Bitcoin’s total market value is over $1.1 Trillion. That’s more than the market caps of Visa ($460 billion), MasterCard ($360 billion) and PayPal ($276 billion) combined. These are industrial behemoths that have been around since 1958. To highlight this enormity further, Bitcoin's value is 4 times higher than the 20 largest Malaysian companies combined. Starting in October 2009, Bitcoin is a "Johnny Come Lately". But NOBODY is laughing at Bitcoin anymore. Those who "missed" out are instead........crying.
And those of you who stuck with us, I want you to congratulate yourselves. You can see the light now......
Not only was Bitcoin the best-performing asset class of 2020… it also obliterated its old highs. Bitcoin rose 308% in 2020 – and just recently was as high as $61,000. Here’s why I feel vindicated: Bitcoin is now the most valuable financial service/instrument in the world by market cap. This is something we’ve been predicting for years. When it fell from $20,000 in Jan 2018 to about $1,800 in Sept 2018, we told our students to "BUY". I recall telling my class, maybe, if you must, sell your house/condo and buy some BTC and keep. I said "In 5 to 10 years from now, it will be extremely rare to come across someone who owns ONE Bitcoin". It's now about RM 230,000 per BTC....how many can afford to buy just 1?
Today, Bitcoin’s total market value is over $1.1 Trillion. That’s more than the market caps of Visa ($460 billion), MasterCard ($360 billion) and PayPal ($276 billion) combined. These are industrial behemoths that have been around since 1958. To highlight this enormity further, Bitcoin's value is 4 times higher than the 20 largest Malaysian companies combined. Starting in October 2009, Bitcoin is a "Johnny Come Lately". But NOBODY is laughing at Bitcoin anymore. Those who "missed" out are instead........crying.
So the question now is, where does Bitcoin go from here?
$500,000 Bitcoin?
Right now, we have a brand-new area of demand for Bitcoin as a corporate treasury asset. It’s incredible. Corporations are sitting on Trillions of dollars of capital. So even a small weightage shift to Bitcoin can have a profound multiplier effect on the price. For instance, ARK Invest Management reported that non-traditional assets like real estate and emerging markets make up 5–6% of institutional investors’ portfolios. So if pension funds and banks allocated a similar weightage to Bitcoin, the report suggests Bitcoin’s price could go to a half-million dollars!
Will this happen overnight? Of course not. Will it happen in a straight line? No, absolutely not. But...
We’re already seeing big established institutions buy Bitcoin. In December 2020, 169-year-old insurance giant MassMutual bought $100 million of Bitcoin. And since August 2020, data consultants MicroStrategy have purchased roughly 90,000 Bitcoin, now worth more than $5 billion… and they paid only about $23,000 per coin on average. That’s an ROI of more than 150% in less than 8 months.
Visa Card just announced that their global processing henceforth will be conducted over the Ethereum (ETH) blockchain. That's an annual $22 billion transaction value processed over the ETH blockchain network and gives the No. 2 crypto in the world, a HUGE stamp of confidence. It's bound to rise in price, and along with it, push up Bitcoin, and other alternate coins (Altcoins) even higher.
So where is Bitcoin headed in 2021?
As I look through the "mystical" charts for 2021, it appears to be very pro-Crypto. Augurs well for BTC and selected Altcoins too.
We’ve reached the tipping point among professional investment managers: Can you imagine, they’re running the risk of potentially getting fired if they don’t own Bitcoin in their clients' portfolios. And that’s a complete 180% turn from just 3 years ago when the CEO of a famous investment bank said he will fire his employees if anyone even mentioned Bitcoin. The very same bank now is a major player in the Crypto space...go figure!
Again, just look at MicroStrategy… its stock price has more than doubled since acquiring its first Bitcoin back in August 2020. I'm waiting to see the same effect on Tesla's stock price, now that it's made a 50% profit in just ONE month.
I can guarantee you corporate boardrooms across the world are paying attention. Everyone is thinking about this. So this is another demand-driver we need to model into the price of Bitcoin going forward. It will take time, but it's a matter of time before investment managers realize the value of Bitcoin as an alternate store of value - considering Biden's Treasury is printing dollars in the Trillions. Corporations would be forced to put Bitcoin in their corporate treasury soon, if only as a hedge against the depreciating USD.
That’s why I believe Bitcoin will continue to be the most valuable financial service (or instrument) in the world… it’s already broken through $1 trillion while institutions have only just begun to invest. The good news is, it’s not too late to own some Bitcoin, even at $58,000 today.
And with BIG old money (estimated at about 5 Trillion USD or more ) still barely in this space, in spite of the 30% volatility swings at times, I see a significant upside going forward. I wouldn't discount a target of $100,000 in the foreseeable future, and maybe US$500,000 by 2030. If you had invested RM 1000 in Bitcoin in May 2016 when I first advised, that investment would be RM 130,000 today: Enough for a brand new SUV. Not a bad "fools gold" afterall!
And to the famous Sage of Omaha who called it "rat-poison" in 2018, I heard he has since eaten his words....and indeed, has plunged into the "game" with many billions invested. Nobody wants to be left out of this "game" it appears. So for the recalcitrants who laughed at Bitcoin, Crypto-currency and the Blockchain technology.....let's see who's laughing now?
