Looking for somewhere to invest your money this year? It could be time to make like the ultra-rich and throw your weight behind Bitcoin – the cryptocurrency that has been making waves for over a decade now, and that has won itself a legion of savvy supporters who undoubtedly know their stuff. Initially a gimmicky concept that went largely unnoticed by London currency traders, it wasn’t until 2010 that it came into the limelight, with early adopters at the time investing quickly and seeing handsome rewards for their fearlessness. Making numerous overnight millionaires shortly afterwards, many of whom were young millennials only just getting started in building their portfolios, it heralded the beginning of a new era of cryptocurrency trading.
But while many of those clamouring to get a slice of the Bitcoin pie and make a fortune in the early days were relative novices, other, more experienced market professionals had their interest piqued by something other than the potential long-term returns of Bitcoin itself. The blockchain technology that bitcoin is based on, and for those in the know, it presented a potentially huge opportunity that could disintermediate financial markets.
The Crypto Craze
No longer viewed as a weird digital fad that would never take off, it has fast become one of the most sought-after assets for investors and traders. Fast forward to today, and Bitcoin and other cryptocurrencies have officially gone mainstream. No longer viewed as a weird digital fad that would never take off, it has fast become one of the most sought-after assets for investors and traders of all kinds. Earlier this year, Bitcoin value spiked, with an eye-watering 600 per cent value increase over the past twelve months alone.
Unsurprisingly, this has led to increasing interest from affluent, high-net-worth individuals looking for somewhere savvy to invest their cash. Currently, some of the world’s wealthiest crypto investors include the likes of Tom Draper, Sam Bankman-Fried and Brian Armstrong – but the list, in its entirety, is endless. While some were some of the first to spot the chance to turn a profit, others were a little slower off the mark – but even those who have invested in the past couple of years are already reaping the benefits.
Those who have invested in the past couple of years are already reaping the benefits
Cryptocurrencies have also become an attractive store of value for financial institutions, with the likes of Goldman Sachs already trading and CitiGroup also thought to be considering making the move. Nonetheless, it hasn’t all been plain sailing; in May of this year, crypto-currencies took a hit, with a rapid sell-off creating turmoil and unrest far and wide. But given the historic trends we’ve seen with Bitcoin, for many it’s all par for the course – and these enormous markets, which today total an eye-watering value of $1.6 trillion – are still as attractive a punt as ever.
For some, it is the future, and with copycat cryptocurrencies including Ethereum, Litecoin and XRP – as well as, more recently, Dogecoin, garnering an increasing level of attention, that might just be the case. Whichever way you look at it, the crypto market as a whole continues to go from strength to strength, and those who are in it for the long-haul remain unfazed by the latest developments.
It’s true that it isn’t necessarily the safest place to tie up your fortune, but for those who have money they can afford to lose, it’s a simple decision. Not everyone is convinced though, and for some, the high risk and volatility that comes with investing in crypto-currencies signal a speculative bubble that could be about to burst at any time. It’s true that it isn’t necessarily the safest place to tie up your fortune, but for those who have money they can afford to lose, it remains a no brainer. For some, the prospect of enjoying such immense growth in the long-term is just too attractive a prospect to pass by, and the obsession with crypto – and specifically, Bitcoin – is showing no signs of slowing down amongst the ultra-rich anytime soon.
Ultra high-net-worth individuals (known as UHNWs) such as Stanley Druckenmiller and Paul Tudor weren’t convinced initially, but have since done a 180 flip, with the former warming up to crypto as a store of value in 2020 and taking steps to invest. Shortly after Wall Street legend Bill Miller spoke out to recommend Bitcoin, Druckenmiller announced his belief that Bitcoin could, as an asset class, offer untold attraction as a store of value to millennials, and that the brand was enjoying greater stabilisation by the day.
The future of Bitcoin is unpredictable, the general consensus currently seems to be that it’s worth taking the risk
Having famously bet against the British pound in 1992 alongside tycoon George Soros, he went on to claim that he expected to say that he expected his Bitcoin investment to ‘work better’ than gold. A bold statement from a man who undoubtedly knows his stuff, and one that has caused many more keen investors to take note. What lies ahead for Bitcoin is unpredictable – but we’re seeing an overwhelming number of knowledgeable investors and business people hurrying to throw their weight behind it. Whether it’s for you or not is a personal decision – but the general consensus currently seems to be that it’s worth taking the risk.