Should you invest in Bitcoin ? or on the future of Bitcoin

Is Bitcoin in a Bubble? Some will say yes, others no. Also the answer depends on the scale. Short term, seeing the parabolic move, for sure it’s a bubble in all standards. But Amazon, Facebook, Google at one time were also qualified as been in a bubble short term. Long term, the question is more difficult to answer. Instead one could rather ask: can you afford to take the risk and what are the major risks?

I do believe Bitcoin is a really good invention that could have a great future. But it doesn’t deliver on its original promise. It was created as a reaction to 2008 crisis of banks too big to fail and today it is controlled by a bunch of (chinese) miners and a bunch of so called whales investors. Now on these sides, the risks are little except for a few short term manipulations. These are the usual game who will wipe out those who want to gamble without being knowledgeable enough. They’ll lose their shirts but they’ll deserve their fate.

Long term, the real risk is regulation. Money is the number one sovereignty tool of government and there is one thing that is common to Capitalism and Communism which is: Central Banking. That a Central Bank is private like in United States or public like in European Union is useless debate, what matters is they’re independant from democratic governments and so controlled by the banking system. That banking system knows since long that it is crucial for them to control the circulation of money (which is credit backed by government bonds ie debts) to keep the wealths of their people who benefit from them.

If Bitcoin was to replace official currency it would be bad for them. So what would be probably the fate of Bitcoin long term? Like Gold it could be hyped until such a great bubble that it will crash and never go back. It could also be kept to serve as a vehicule for big money laundering as regulations on traditional banking are tightening for small fishes not really the big ones (like when selling weapons, bying oil,…). As usual these regulations are made by consulting firms who have more interest to generate contract services like in IT than to really protect against money laundering since they also advise clients on how to do fiscal optimization – they won’t shoot themselves in the feet will they ?

Bitcoin can also serve like stock market to keep consumers spending on the illusion of wealth – while keeping inflation apparently low since money is pouring into virtual assets instead of the economy. Many young people are willing to buy bitcoin because it’s easy whereas buying stocks is much more a hassle, requires more capital and more time.

So I think Bitcoin is here to stay for a rather long time until Government think the population is ready to accept that fiat currencies are going to be on the blockchain themselves and then forbid bitcoin at least for Dictatures like Russia or China whereas in Democratic countries, Bitcoin could still thrive for the reasons exposed above.

In conclusion, there wouldn’t be so many risks in investing in Bitcoin if you follow the basic rules of investment: never use capital you need for living, only invest 1/10th of that capital to enter the market each time so as not to buy at the highest high and being the lastest fool at this speculative game. Of course I’m not here to give advices for investing but give my viewpoint on the big picture.