Tag: MicroStrategy

There is one simple thumb rule to investing in assets, Bitcoin included, and it is – learning to take volatility in your stride. Given the fickle nature of the investment world where the graph swings wildly, it takes a strong heart to ride the wave. Trading in Bitcoins is no exception.

A lot has happened since the mysterious Satoshi Nakamoto gave the first Bitcoin specification with proof of concept in 2009. Two years later, on February 9, 2011, the cryptocurrency (or crypto) reached parity with the US Dollar at a 1:1 ratio. This means you could buy a Bitcoin for just one dollar. Since then, Bitcoin has been on a roller coaster ride touching $62,006.92 on April 17, 2021. To put things into perspective, between Feb 9, 2011 and April 17, 2021, the value of the Bitcoin has gone up by nearly 62,00,600 percent. Yes, the figure could boggle your mind, but that’s what it is. As of August 29, the crypto was trading at $48,616.15. The $1,00,000 mark predicted by optimists is yet to happen though.

Nakamoto, in setting a 21 million cap, created a distinct identity for the world’s foremost cryptocurrency. With a circulating supply of around 18 million Bitcoins against the above maximum cap, the fluctuation is only expected to increase. Regulatory statements coming out from Russia and China and idiosyncrasies of investors such as Elon Musk and Michael Saylor only add to the edge-of-the-seat excitement in the Bitcoin world.

History of Bitcoin crash
Bitcoin has witnessed several small and big ‘Boom and Bust’ cycles ever since it arrived on the investment horizon. Here are two significant crashes that are still talked about.

• Between April 10 and 12, 2013, the cryptocurrency shed more than 80 percent of its value.
• In December 2017, the cryptocurrency’s value peaked at around $20,000, and after this high, it considerably collapsed.

When it comes to Bitcoins, everyone’s opinions stand divided. Warren Buffett had termed Bitcoin as a risky and speculative asset. On the other end of the trading spectrum, support from critic-turned-fan Saylor makes Bitcoin investors hum Yeh Dil Maange More.

The unpredictability notwithstanding, what makes investing in Bitcoins interesting is that, unlike the institutional investors who buy it in large numbers, individuals too can own a fraction of this crypto down to the eighth decimal point. It thus makes sense when Saylor tweeted last year that he holds 17,732 Bitcoins that he bought for $9,882 apiece. This declaration came much before the business analytics platform – MicroStrategy that he heads did so. More and more institutional investors are pouring money into Bitcoins as compared to retail ones.

Will we see another Bitcoin crash?
Any investment is done primarily for returns. The higher the returns, the higher would be the investment. Backing exactly this sentiment, Saylor and his ilk preferred Bitcoins over gold. In 2020, Bitcoin outdid every other asset to give 318 percent returns.

Over the last year or so, there has been a steady influx of positive stories on the Bitcoin front:

• In September 2020, MicroStrategy acquired a total of 38,250 bitcoins valued at $425 million and subsequently announced its intentions to raise another $537.2 million to buy even more bitcoin
• In October 2020, PayPal allowed their customers to buy, sell, and hold bitcoin using their online wallets.
• In February this year, electric car manufacturer Tesla announced that they had bought $1.5 billion in Bitcoins. The company added that they are also likely to accept the cryptocurrency as payments.
• Recently, El Salvador has adopted Bitcoin as legal tender and the Argentinian President also said that he is open to the idea of treating cryptos as legal currency.

These stories have boosted the sentiment around Bitcoins.
However, going back to what we mentioned at the start of the story. Bitcoin and other cryptocurrencies are highly volatile. Their prices will touch highs and lows all the time, so it’s tough to predict a rise or crash. Nobody can say that with any guarantee or certainty. But what you can do as an investor is be prudent when it comes to investing in Bitcoins.

One approach that you can follow is rupee-cost averaging. Instead of buying Bitcoins for a lump sum amount in one go, what you can do is spread your investment over a period of time. This will shield you from Bitcoin’s volatility upto a certain extent and also give you better returns.

The best time to buy Bitcoin was 2009 and the next best time is today. Helping you invest in Bitcoins in a safe, secure and simple manner is ZebPay. With ZebPay, you can begin your cryptocurrency journey for as little as Rs 100. Start now and get ready to ride the crypto wave!

Bitcoin’s recent report card

• December 16, 2020: Bitcoin touches $20,000/coin for the first time ever
• April 13, 2021: Bitcoin touches a record high of $63,375
• June 22, 2021: Bitcoin slips under $30,000 for the first time in five months
• August 2, 2021: Bitcoin rally takes it to the highest level since May at $40,000
• August 23, 2021: Bitcoin returns to above the $50,000 mark

Disclaimer: The above content is non-editorial, and TIL hereby disclaims any and all warranties, expressed or implied, relating to the same. The article does not constitute investment advice. Please take all steps necessary to ascertain that any information and content provided is correct, updated and verified.