Bitcoin Price: How Will Halving, Coronavirus Affect BTC?
Many people ask me, “How will the Halving of the Bitcoin block reward affects BTC? Can I hold BTC long term, and sell them short when the price goes down?” Many folks have started a Bitcoin exchange short term, but they are missing the bigger picture.
While the short-term gains may be tremendous, to hold BTC as a long term investment requires awareness of the big picture. The price is not set by the prevailing sentiment of the masses. In other words, the quantity of BTC currently traded does not reflect the money supply, which can change very quickly in a short period of time.
Therefore, to keep a long term view on BTC, you must have a goal for holding the BTC for a long term. The big picture is to recognize that BTC, at this time, is a money transfer system, and not a store of value like gold or silver.
It is my observation that many people do not understand the great money management strategy of holding less than your own full income in BTC. Rather, they focus on the potential for instant wealth, like gold and silver. Their main objective is to live beyond their means, and get rich quick, even while they hold lesser value than they need.
While they do have desires, their goals are just as out of reach as their desires. Instead, the real goal should be living beyond one’s means, even when it takes five years to double one’s asset base. This is more attainable than the fleeting gains of the short term and will allow for greater appreciation.
BTC has a higher intrinsic value than gold, but only if the intrinsic value is driven by the underlying cost of gold. For this reason, BTC is a good hedge against inflation, since one only needs to exchange a small part of one’s savings to purchase one ounce of gold. If inflation occurs, BTC is a hedge against that risk.
People who are comfortable holding only a small amount of BTC to facilitate their goals, but a significant portion of savings, should attempt to achieve their appreciation level without doing anything to increase the value of BTC. They simply trade their assets and let the price adjust accordingly.
When the demand stays high, and the supply is low, the price will fall. When the supply exceeds demand, the price will rise.
Many people invest in their own currency, when they trade with it, especially if they don’t have an appreciation level that is as high as their own currency. This is often the smartest thing to do. It is much easier to purchase a stock that has a long term appreciation, than it is to buy a stock that has a short term appreciation.
Remember, not all stocks have the same intrinsic value. They also can have different prices for investors. You need to be careful of the artificial or fictitious appreciation levels and financial projections that brokers will subject you to.
Too many people rush into trades, before they really understand the market, or their own portfolio, and become frustrated when the price doesn’t move in their direction. They may end up losing the trade, when the price is driven by what the broker or programmer has selected for you.
Please consider all this and think on it, Dave Cash, or Gavin Andresen, I want to continue to help and be of service to you all, so please consider all this and think on it. The future of our economy is in your hands.