The secret of making money is generally accepted to be Buy Cheap and Sell Dear. Since March 31st, Bitcoin has been slowly stabilising and increasing in value. Warren Buffett summed it up the best when he advised: “Wide diversification is only required when investors do not understand what they are doing.” The world of investing can be hard and sometimes expensive lessons will need to be learned, but it’s an old maxim that investing in what is comfortable is rarely found to be profitable. Investing in bitcoins, on the other hand, is not just purchasing equity, rather it is an investment in, and a commitment to, the Bitcoin concept. A commitment to Bitcoin is an investment in the technology that supports all cryptocurrencies and, therefore, is, an investment in the future. The currency has fallen in value as more and more governments move to legislate for transactions and capital gains. This was always going to happen. Remember, in the words of Jean Baptiste Colbert, “The art of taxation consists of plucking the goose in order to obtain the largest amount of feathers with the least possible amount of squawking.” The majority of the population do not possess or use bitcoins, therefore, a tax on bitcoins brings in money without affecting the majority of voters. If Bitcoin were not a galloping success, there would be no moves to tax it. The goose produces feathers while remaining largely silent.
Ron Paul has explained that: “Income taxes are responsible for the transformation of the Federal government from one of limited powers into a vast leviathan whose tentacles reach into almost every aspect of American life. Thanks to the income tax, today the Federal government routinely invades our privacy, and penalizes our every endeavor.”
Bitcoin was always going to attract scrutiny in a world that needs an income. We should seek to ensure that the bad news, when it arrives, is viewed within the correct perspective. We have a project that has been such a monumental success that governments now want to get on board. We all seek to achieve a financial benefit and this regard states are no different. Benjamin Franklin advised us many years ago that we can be certain, only, of death and taxes.
Bitcoin has currently suffered from bad press and a nervous market since December, In the words of a friend of mine: “We’ve been taking more hits than a bloody Porn Site.” Prior to December, we were investing in a ‘Bull Market’ and in a Bull Market everything goes up and every investor thinks he’s Warren Buffett. Those days may well prove, to be not that far away again. There is a potential for 21 Million Bitcoins; Mining is currently unprofitable and the level of mining has fallen. Two things will restart mining:
(1) The development ot new technologies that enable us to mine more effectively, New computer processors that work faster and smarter.
(2) A rise in profitability that makes mining, once again, viable, this would happen only as the price of a bitcoin rises.
Bitcoin is now a more attractive investment opportunity that it has been since September last year, what we have seen in the past six months is a market seeking to normalise. The value in November was too high, too much, too fast. In order for a high value to be maintained there must be a commitment from core investors and developers. In the period from September to November, speculators came on board, from December to March, they have been leaving. I previously wrote about the triple dip as a very bullish signal. In the past four days, Bitcoin has achieved this. If you hold bitcoins you can expect them to now slowly begin to grow in value and if you want to increase your holding this is now an excellent time. Retailers are accepting bitcoins at an ever increasing rate. Let us not find ourselves being left behind in this recovery.