Bitcoin and Cryptocurrencies have been the subject of intense speculation.
It’s human nature to doubt new things that deviate from routine– in this case, it’s the introduction of a form of currency that heavily differs from traditional assets like stocks, bonds and real estate. However, in Bitcoin’s very young age of 15 years, it has already shown itself as something to stay and is even out-performing other assets.
But there are still skeptics out there– you might even be one! The purpose of this blog isn’t to force the orange pill down your throat; it’s simply to clear some misconceptions that have been circulating throughout the years. We hope this blog will be able to shed some light on these topics. Evidence is provided as needed below!
Bitcoin Myth #1 - BITCOIN IS JUST A FAD
Crypto has been around since 2009– Satoshi Nakamoto invented Bitcoin as an answer to the Global Financial Crisis (GFC) in 2008. The GFC was thought to be caused by rising national debts and interest rates, causing market crashes and a global recession.
Bitcoin as an alternative provides a hedge against inflation that’s decentralized, borderless and transparent. So why isn’t everyone trying to get it yet?
Think of BTC adoption as similar to that of the Internet. Adoption grows as more people understand its potential. Back in the early 2000s, having internet was rare and in dial-up form; and yet now, we have tiny devices that can have high-speed internet wherever, whenever we want.
Bitcoin Myth #2 - BITCOIN IS TOO RISKY
All investments– crypto, real estate, gold, stocks– are inherently risky. Surprisingly, when you look up the Compound Annual Growth Rule (CAGR) of these assets, Bitcoin heavily outperforms everything else! Data can’t lie, can it?
However, risk is relative and can always be managed with knowledge and strategy:
- Diversify: Pair your crypto investments with other assets to spread the chance of risk. This way, if one of them crash, you still have others to turn to.
- Long-Term Focus: When investing in Bitcoin, you need to adopt a long-term investor mindset. Data shows that anyone HODLing Bitcoin for 4 to 5 years or one full cycle has not lost money at all, and even gained much more than traditional investment assets.
Bitcoin Myth #3 - BITCOIN HAS NO VALUE
Bitcoin isn’t backed by physical assets like gold or the dollar is. But value isn’t always something that you can touch– most of the time, value comes from what this asset can do.
And why would anyone invest in Bitcoin if it has no value?
Bitcoin’s value comes from:
- Decentralization: No central authority can and will ever be able to control it.
- Transparency: Blockchain technology ensures all transactions are publicly recorded.
- Scarcity: With a fixed supply of 21 million coins, BTC is resistant to inflation.
Bitcoin Myth #4 - BITCOIN IS USED ONLY FOR ILLEGAL ACTIVITIES
This myth stems from Bitcoin’s early days and involvement in Silk Road. Today, though, almost every crypto transactions are legal. Since Bitcoin is on the blockchain, which is transparent, illicit activities are harder to hide.
Real world uses drive BTC adoption. Did you know you can donate to a lot of nonprofit organizations like UNICEF and The Water Project with crypto?
Bitcoin Myth #5 - IT'S TOO LATE TO INVEST IN BITCOIN
Many clients ask me during bull markets, “Am I too late?” Then, they buy at price X and still get surprised when the price continues to rise. You’re not too late– at least, not yet. We’re still at the early stages of BTC and crypto adoption.
Only about 7% of the world population now has crypto and the ecosystem is still evolving and getting ready for the future.
It’s never too late to take a long-term, strategic approach to investing in Bitcoin and beyond.
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