Current BTC Chart – Down more than 80% since the ‘bubble’ high of ~$1200 in end of 2013. It is impossible to determine a fair value for this currency because there are no fundamentals you can measure this against. While it is impossible to tell where this is headed, the currency has become less volatile than it used to be. Moreover, the chart tells us the potential for large moves if BitCoin turns bullish again. If BitCoin was to get back to the previous highs, it would deliver 4-5X gains.
BitCoin started of with a bad reputation. It was often attributed to a pyramid scheme scam, used mostly for sketchy activities such as buying and selling drugs. Many, including yours truly, thought Bitcoin wouldn’t make it past the Mt. Gox incident. Yet Bitcoin has continued to survive and is now making splashes in both the Private Markets as well as Public Markets. In the below picture, you can see that the trust in BitCoin and VC investments has really taken off. In Q1 of 2015, BitCoin VC investments hit a record high and is on pace for a record $1B in investments this year.
Some big credible private Venture investors include:
Andreessen Horowitz: Top 5 VC w/ extremely profitable early investments in Facebook, Twitter etc. They have already invested more than $50M and plan to double that number.
Billionaire LinkedIn co-founder Reid Hoffman has invested in BitCoin startups like BlockChain. He calls BitCoin his 5 year investment.
Goldman Sachs drops $50M in to BitCoin & says : “Bitcoin Could Shape ‘Future of Finance'”
Google Chairman Eric Schmidt, Yahoo founder Jerry Yang, Khosla Ventures & many reputed venture firms have pumped money in to companies like Blockstream.
Last but not least, here are some example logos that actually accept bitcoins for payments. Talk about getting too big to fail.
The strong support for bitcoin coupled with the fact that bitcoin price has taken a significant hit recently, makes it a very interesting addition to my portfolio with a great risk/reward ratio. I have started investing in BitCoin using a diversified strategy that involves buying crypto-currency (directly & indirectly) as well as investing in private BlockChain startups through investment firms. My BitCoin investments remains smaller speculative positions with money I am willing to lose. I will share the details & methods of speculating on BitCoin in a separate post.
Hope you guys found this post useful.
DISCLAIMER: The above is my opinion intended for informational purpose only and should not be used as professional financial advice. The above is not a recommendation to buy, sell, or short stocks or options. By reading the above text, you agree that any trades or investments you make are solely your responsibility. I cannot assure you that the above information is accurate. Trading stocks or options can be risky. Any profits, losses, or break even are solely your responsibility. Please consult a certified professional before buying or selling any such stocks or options.