A question we get asked often is: "Am I too late to invest in cryptocurrencies?". For us this is a no-brainer, but since this question still seems to be on many people's minds, we decided to dedicate a blog to this. A little sneak peak: the answer is resolutely no!
Gold has been the investment of choice for thousands of years, and yet no one ever asks themselves if it is too late to buy gold? Thousands of years, of course, are nothing compared to the eleven-year existence of Bitcoin, which is called the digital gold, but it is a start. People don't call this the digital gold for nothing. As with precious metals, Bitcoin involves scarcity. That scarcity, or shortage is encoded in the source of code. That is why the creation of new Bitcoins is called "mining", a nice nod to the mining of precious metals.
All over the world, there are warehouses filled with heavy-duty computers. These participate in the security of the network, and help bringing the newly mined BTC into circulation. It is important to know that only up to 21 million Bitcoin can be mined, after that no more can be "made". Today's calculations tell us that the last Bitcoin will only be mined around 2140. But how can that be when you know that there are already over 18 million in circulation today? This is where we stumble upon the magic of BTC. this ensures that the price will always be pushed upward in the long run, namely halving.
What is a halving?
In the mining process, it takes about 10 minutes in the blockchain to mine a block. For every block mined, a reward is handed out to the miners. In the early years of crypto, this was 50 BTC, every 10 minutes. The first halving caused this, to be reduced to 25 BTC. In other words, only half as many Bitcoins came into circulation using the same work and the same amount of time.
Every 4 years
Now, such a halving occurs about every 4 years. The last halving was in 2016 and resulted in only 12.5 more BTC circulating every 10 minutes. Many are convinced, that this halving caused the big bull run in 2017. In a way, that makes sense. Bitcoin's popularity is constantly rising and demand is consequently increasing, but the fresh supply keeps halving. This creates the scarcity that has earned Bitcoin the name of ‘digital gold’.
At this writing in late April 2020, we are about 20 days from the next halving. What is about to happen, remains a matter of conjecture but it could be a fierce ride. Even after any subsequent bull run, the currency will likely crash back, have no illusions. Bitcoin has always done this after sharp rises, and this trend is likely to continue for some time. But that's the great thing about this market: with the right knowledge, you learn when it's best to enter the market, but also when to collect your profits.
Learning to surf the crypto waves
You can't ride the big waves of Bitcoin, but you can learn to surf them. So if you ask me the question if you are too late to invest in Bitcoin, my answer is simple. As long as there are halves happening, then you are definitely not too late. However, a big additional factor that may play into the whole crypto thing in the future, are the institutional investors who are eager to get in. This is all still somewhat held back by government agencies, but the popularity of crypto ensures that these institutions will slowly, but surely have to make concessions to the Cryptospace. Once that happens, the ball may very well start rolling.
38 million millionaires
To conclude this piece, let's make a simple calculation. We know that there are approximately 38 million millionaires in the world. We also know that only up to 21 million Bitcoin can exist, as well as that people, especially the elite, are becoming more interested in Bitcoin by the day. Then imagine that all these people want to buy 1 Bitcoin, which is impossible due to its scarcity. Do you then see how the supply and demand structure of Bitcoin will flourish, and how this currency can truly become digital gold? I don't dare speculate too much myself, but I think you can immediately see, that this system could become very lucrative for early adopters.
Somehow I know that time is coming, it may not happen tomorrow or maybe not even next year, but in my opinion it is coming. Until then: make sure you take the waves nicely, secure your piggy bank and enjoy the ride!