SIX REASONS FOR BUYING BITCOINS IN HISTORICAL MAXIMUMS

About the situation:

The price bitcoins with an enviable regularity sets all new records;
There are a number of reasons for the bullish mood in crypto-currencies;
It's very difficult (impossible?) To give a rating to bitcoin, but let's take a look at it in the future.

At the time of this writing, the bitcoin price has reached a new record level of $ 1,722. Most of the reasons why the author is bullish on the given crypto currency (or digital asset) remain in place. The following are the six most important ones:

Venture capital puts on a large scale

At the moment, $ 1.5 billion of venture capital is supported by various crypto-currency start-ups. For the most part, these are start-ups that make the blockchain and crypto currency more accessible and useful. Payment systems benefit from increasing the network effect, it is very important for them to gain momentum. This year, about $ 100 million of venture capital has come into the sphere of crypto and lock-up, which is slightly behind the similar indicator for 2016.

Network effect

As already mentioned, there is some kind of network effect visible. If you take Coinbase alone, in 2013 there were opened 13,000 wallets, and now there are already 6.8 million. Coinbase relies on the big names in the world of venture capital investment:

Large business adds (values) to the ecosystem

But not only venture capital is invested in the development of the ecosystem. From such a large company as IBM there is a constant stream of press releases on the subject of blockchain. Overstock created the first crypto stock exchange and through it issues preferred shares. Microsoft began to accept bitcoins for payment.

Enter hedge funds

The graphs below show interest in bitcoin in Google search queries, as well as distribution of requests for cities. There is an increased interest from hedge fund communities near New York. This suggests that people living there are engaged in self-education in the field of crypto-currencies:

Enter management companies and households

As well as hedge funds, management companies and households increasingly recognize the potential of crypto-currencies. Earlier I described how the American management company Horizon Kinetics opened the Bitcoin Fund for its customers, and it showed great interest:

In 2016, Horizon Kinetics established an investment bitcoin fund. Bitcoin is an example of a crypto currency. This asset class will be discussed in more detail in the section on investments in the Digital Currency Group. This asset class did not yet exist only a few years ago, it is completely new. The Fund has set the maximum investment for one client at $ 50,000. We do not know of any other firm that would limit the amount of customer deposits. Nevertheless, we believe that this is the simplest and most obvious way to control risks. We simply limit the amount of money that can be lost to an acceptable amount. Invest companies often complain about the short-term focus of clients. Short-term focus is quite understandable if unsuccessful investments can negatively affect their lives. But in any case, we quickly sold almost all the investment slots available for investment.

Later I learned that the company has two funds that are open only to accredited investors.

Ark Invest holds funds in bitcoins through the well-known GBTC trust. They hold GBTC in the funds of Next Generation Internet ETF (ARKW) and the ARK Innovation ETF (ARKK). Horizon Kinetics also invested in GBTC via Kinetics Internet Fund No Load (WWWFX), Kinetics Paradigm Fund No Load (WWNPX) and Kinetics Market Opportunities (KMKAX). When the purchase of securities of the fund is spread, it really can open a big road to bitcoins, as previously wrote:

Globally, there are over $ 100 trillion in management. Imagine what will happen if only 0.1% of these funds go to bitcoin ?
Institutional investors holding funds for diversification or pursuing long-term investment goals may be much stronger than current bit-market traders, which could help stabilize bitcoin's volatility, which in turn would make it much more attractive For other investors and retailers.

Overclocking bitcoin

Now that bitcoin has reached record heights, and there is no benchmark to assess whether it is undervalued or overvalued, many think: "Probably, this train has already left." One of the options, I think, is the following: "Can bitcoin or another crypto currency achieve the market capitalization of Visa?" Or, perhaps, oust Visa? Can such a crypto currency become something like digital gold? Can it replace the dollar as a world reserve currency? If your answer is "yes" to any of these questions, then the bitcoins price can at least quadruple: