The Bitcoin price soared through US$4,000 over the weekend, you’d be forgiven – if you haven’t bought any bitcoin for thinking you’ve missed the boat, that it’s too late… that the opportunity has slipped through your grasp.
Relax, the opportunity is still there. But it’s meaningless if you don’t take any action to seize it.
The Media Still Misses the Point
“Bitcoin’s core use remains what’s it’s always been: paying for drugs or extortion fees on the Internet.”
Fortune magazine, August 10, 2017
A friend of mine forwarded me an article from Fortune magazine last week that included “3 Reasons Not to Buy Bitcoin”.
I was interested in this because, as someone who is bullish on the future of bitcoin, I’m always looking for contrary opinion. I don’t need more reasons to buy bitcoin, I want reasons not to.
The suggestion that bitcoin’s core use is for buying drugs and extortion, however, is nothing new – and it’s part of the media’s ongoing narrative . It’s understandable in many respects.
The infamous “Silk Road” website of the dark web (the internet hidden beyond regular websites) was the equivalent of Amazon.com for narcotics, where it was only possible to pay using bitcoin or cryptocurrencies. And a recent ransomware hack/virus called WannaCry demanded that users who wished to unlock their computers pay a small ransom in bitcoin.
Related: Should You Own Bitcoin or Gold?
However, to infer that – since bitcoin was the method of payment required by criminals – that therefore bitcoin’s core use is criminal is like saying you shouldn’t buy U.S. dollars because it’s the currency of choice for global drug cartels.
And on the flip side, it’s also worth noting that neither Standard Chartered Bank’s laundering of an estimated GBP192 bn (US$250 bn) over 10 years for the Iranian government, or HSBC’s complicity in laundering Mexican drug cartel, money had anything to do with bitcoin or cryptocurrencies.
(The other two reasons not to buy bitcoin cited in the Fortune article were 1. that it’s volatile, and 2. that it only exists on computers. The price of bitcoin has risen four-fold this year, so yes, it’s volatile. And Facebook, Google, and pretty much every internet business exists only on computers – is that reason enough not to own them?)
*This is a guest post by Stansberry Churchouse Research, an independent investment research company based in Singapore and Hong Kong that delivers investment insight on Asia and around the world. Click here to sign up to receive the Asia Wealth Investment Daily in your inbox every day, for free.