What could be the next potential asset to roll into when the bitcoin bull market reaches its top? There’s a whole lot of other assets out there, but is there anything that will match bitcoin once it rises once more out of its year-long bear market?
What could do better than bitcoin?
Imagine the scenario. Bitcoin tops out at let’s say $150,000 in around a year’s time to 18 months from now. You’ve made some fantastic gains, and much of this has possibly been made from the altcoins. You sell your altcoins without hesitation, but your bitcoin - that’s another matter. What could possibly do better than bitcoin, even though it potentially needs to go through another year-long bear market?
Cash means inflation and debasement
Many retail investors will very probably sell their bitcoin for cash. Overjoyed with the gains they have made, they will hopefully sell somewhere near the top (most will likely not manage this) and then they will transfer all that lovely cash into the bank. Job done.
Or is it?
There is much to be taken into account before considering selling into cash. For one, that cash is potentially going to lose at least 7 to 10% in inflation over the next year (if real inflation is taken into account rather than manipulated government figures), and that’s only if things stay as they are. Inflation is already rearing its ugly head again, and who knows if it will have taken off skywards in a year’s time?
There’s also the mass printing to come from the world’s central banks, especially from the Federal Reserve. US administrations operate in the belief that whenever they need more money they just need to print it out of thin air.
Who pays for all this? It’s the poor and the middle classes, given that most average citizens do not own assets. The rich are fine because their assets go up as more currency is printed, but those without assets just see their currency being debased and their wealth disappearing at an ever-increasing rate.
Holding bonds means holding government debt
Ok, so the store of value in cash is alarmingly temporary. So what about government bonds? By holding bonds you can earn a yield. But holding bonds means you are holding government debt. Does anyone really trust their government to behave responsibly enough for their bonds to hold their value?
Stock market driven by only seven companies
So what about the stock market? But there are only seven companies driving the entire stock market. Is this a healthy market when only seven massive companies are driving the entire US stock market on their own? They can keep buying their own stock so that price continues to go up, but for how long can this last?
Gold has its own inflation
Gold and silver are seeing unprecedented rises in their price. By buying these at least you have thousands of years of history on your side. That said, gold only really holds the value that you buy it at. That is its monetary role. It doesn’t increase in value per se, although even with gold, there is a 1 to 2% inflation rate every year as more gold is mined out of the ground to add to the supply.
Real estate has its headaches
How about real estate? Bricks and mortar only go up in price don’t they? A hard asset like a house is not a bad option at all. If you have more than one you can rent it/them out and gain a steady passive income. That said, there are also plenty of problems that come with house ownership, such as: property tax, income tax, maintenance, interest payments, insurance, difficult tenants - the list goes on.
Bitcoin is eating every other asset
For all these asset options, there is one thing that needs to be taken into account. A comparison needs to be made against bitcoin. If you do this, you will find that every one of these aforementioned assets has decreased more than 99% against bitcoin. By using a platform like TradingView, one can easily set up charts to compare bitcoin with everything else - when seen in chart form, the results are startling.
So what are you going to do with your bitcoin if you are lucky enough to call this bull market top? Yes, bitcoin is likely to reduce in value significantly after reaching that top, but are we still going to get bear markets like we’ve seen before? The institutions are now arriving and with all this buying going into the future, as each institution of countless thousands puts from 1 to 5% of bitcoin into their portfolios, what are the chances that bitcoin will ever see corrections of more than 50% again?
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
