How’s your Vision?
In 2017, many people *dog*-piled into cryptocurrencies because they were seeking “fast money” or a “get rich quick” scheme. The issue was, that those who were making the phenomenal gains, were the investors who had gotten into crypto five to ten years earlier. We are using the term “investors” loosely in the above paragraph.
The majority of the early adopters of cryptocurrencies were not looking to make multiple triple-figure gains from their “investment”. The majority of crypto purchasers in the early days, were people who saw the faults of the financial system (particularly after the GFC and the bank bailout). These early adopters had lost faith in the official system (Fractional Reserve Banking) and wanted something different.
Obviously, Satoshi Nakamoto (blessed be thy name) was the true pioneer. Satoshi created Bitcoin and a whole new monetary system, free from banks, safe from inflation and impervious to government intervention. Satoshi did not have the intention of becoming a billionaire (although it is likely this happened); the main intention of Satoshi was to help people to navigate through an environment in which big banks and governments could no longer be trusted.
Early adopters of Bitcoin were trading their BTC as if it were cash dollars. They were paying for goods and services amongst friends and colleagues, not hiding it under the mattress. BTC was never intended solely to be held for ten years. It was created to be used. Holding it was just a bonus.
Bitcoin: will it be the terminator of Gold?
Many investors have likened cryptocurrencies (BTC in particular) to “digital gold”. If we look back at ancient societies where gold was first used, gold was both a utility and an investment. It was created to be used: gold coins were traded for land, weapons, grain or livestock, just as we use cash today. Gold could also be an investment, in that it existed in finite amounts, which made it desirable and precious, and likely to increase in value over time.
Australian economist and self-made Billionaire P.J. Daniels once showed the difference between an ounce of gold and a stack of banknotes.
He stated that in the early 1900’s, an ounce of gold could buy a man’s suit. So could a single $US. But by the end of the century, a single $US could not even buy a man’s tie. The ounce of gold could still buy a man’s suit. Despite fluctuations in the gold price during wars, recessions, depressions and more, gold had held its value over 100 years.
The dollar was almost worthless, around 95% devalued; this indicated that inflation and government control could kill the value of your money.
Boston in Ancient Rome
Whether it was in Roman times or in your grandparents’ time, if you brought in ten gold coins per week and only spent nine, then your accumulated wealth could be worth millions over time. The same is not true of your cash dollars. A century ago, the average US worker was paid $450 per year. Even if you had saved 10% of this income for your whole working lifetime, you would only have around $2000, or enough to retire comfortably for five years and then die. (We are obviously ignoring bank interest which you would earn over 50 years, which makes a big difference to savings. However, the effect of inflation and taxation erodes practically all of the interest over the period.
If you are lucky enough to earn 3% on your cash savings, you may find that taxation will remove a third, or 1%, and if inflation of goods and services runs at 2%, then your money has only risen to keep up with the cost of goods.) Regular saving and investing is a great idea. Putting aside 10% of your income has been a staple of investment advice: from ancient wisdom such as “The Richest Man in Babylon” to the latest book from the most modern celebrity financial adviser.
As long-term investment advisers, we are also advocates of long-term savings and investment. We are also fans of having a life, so it’s OK to spend cash money (or spend crypto) when you choose. Nobody is suggesting that you should live in a cardboard box and eat baked beans every day so that you can be a millionaire later; that’s no fun.
Most investment advisers from ancient times to modern times will say that 10% is a good place to start regular investing, and it’s still fun to live on 90% of your income.
What’s your Vision?
In the past six months, crypto has been recovering from the dog-day depths of December. As a general observation, most coins are worth more than what they were five months ago. Yes, things are still volatile. Yes, there will be more drops over the next few months and years. However, there will also be rises. We believe that cryptocurrencies (“digital gold”) will be a growth asset for the future, just as the price of gold, properties and stocks/shares have increased over time, despite wars, recessions, depressions and booms and busts. The advice from 5000 years ago is the same as it was five minutes ago: save and invest regularly over time, regardless of market conditions.
There have been many people saying “I will invest into crypto when it crashes”, but have you ever checked back with them to see if they did? Or are these people just “gunners” and always saying what they are “gonna” do, “when the time is right”?
Buy All the Time
We at BostonCoin have put our money where our mouth is. We have bought Ethereum at $1000 and we bought it again when it dropped to $300. We have bought Bitcoin at $17 000 and we have bought it again at $5000. It is important to buy during the dips, but because not even the best economist with two crystal balls can accurately pick every dip, it is important to buy all the time… In years to come, we will probably not remember how much we paid for each coin.
The main issue in ten years will be “how many coins do you have?” We are happy to discuss regular savings and investment plans which can be tailored to suit you. Whether you want to invest $100/month, $1000/month or $100 000/month, we suggest doing so on a regular basis (what the experts call “dollar-cost averaging”). Invest frequently. Invest for the longer term. Diversify. It’s not rocket surgery 🙂
Even a partially well-trained puppydog could do it. Call us and ask how.
Where are we invested now?
BostonCoin continues to diversify amongst dozens of cryptocurrencies, using the proprietary C.O.I.N System.
How are the charts looking?
Most coins crashed in December 2017, rose again during 2018, crashed in December 2018, and have been rising well since then. Will the crypto market drop again in December 2019? Nobody knows (if you think you do, then feel free to visit #FireLotto right now and take a big gamble). All we mere mortals can do is to invest regularly and watch the far horizon, not the nearby waves.
BOS NTA 30.04.2019 — 28.1603
BOS price 30.04.2019 — 30.9763
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Delaware, DE 19801
