Everybody Wants to be a Bitcoin Billionaire

The value of Bitcoin is doing exactly what many esteemed economists said it wouldn’t.

It’s rising — and it’s rising fast.

Physical representation of a single Bitcoin.

The current surge was triggered by the purchase of $1.5 billion worth of Bitcoin (BTC) by a major corporation earlier this month.

Tesla — founded by Elon Musk, who is currently the wealthiest person in the world — is known for its high-tech innovation in the automobile industry, but it took a gamble when it bought such a large stash of cryptocurrency.

At the time of writing, this gamble seems to have paid off.

That’s putting it mildly: in fact, it seems to have been an incredible investment of epic proportions.

The company has already made more than $1 billion of profit on the deal, which is more than it’s estimated to make this year from all of its car sales combined.

For a long time, influential companies and big banks have been resistant to endorse cryptocurrencies, seeing them as too volatile to be trusted.

That could be about to change.

Since the value of BTC just keeps growing, it seems natural that established institutions and other large investors will want a piece of the pie.

There are no guarantees, however.

What goes up can easily come down, and, as the usual warnings tend to say, past performance is not necessarily indicative of future results.

But some analysts expect one Bitcoin to be worth $100,000 in the not-s0-distant future — which would be a hugely symbolic barrier for the currency to break.

And it’s already worth over half that.

Just consider that five years ago you could buy a single Bitcoin for around $400 — yet it would now be worth almost 140 times as much.

That means that if you’d been wise enough to invest $5,000 in BTC five years ago, your crypto-coins would now be worth around $700,000.

Needless to say, ordinary investments just can’t compete with those sorts of returns.

The payoff has been simply astounding.

Gold bullion has long been used as a safe store of wealth, especially in times of economic crisis.

Traditional funds tend to aim for a much more modest return of around five percent a year, which still allows for the invested capital to grow significantly over the long term.

So it’s clear that no one can ignore the awe-inspiring gains that Bitcoin investors have already achieved, and there are growing signs that the cryptocurrency is heading for the mainstream.

You no longer have to be a tech geek or a finance wizard to get in on the action, because Mastercard will soon accept Bitcoin as a form of payment.

What’s more, BlackRock, the world’s largest investment management company, now holds a large volume of BTC.

Rick Rieder, a Chief Investment Officer at BlackRock, believes that Bitcoin may well take over from commodities like precious metals, because its electronic ledger is so much more “functional than passing a bar of gold around.”

As more major corporations get on board, it’s perfectly reasonable to imagine that the rush of enthusiasm will only push the price even higher.

No one knows where it may end up.

The City of London, the traditional home of Britain's finance industry.

Some experts think that there’s an economic bubble about to burst, however.

Speculation can produce fast-gotten gains, but it can also lead to painful losses that can accumulate just as quickly.

We saw this in 2017, when cryptocurrencies reached record highs, only to fall back down to earth again within weeks.

Some have said that the price of Bitcoin is being artificially inflated right now, because investors are temporarily staying away from government bonds to escape the rock-bottom interest rates set by national leaders as they attempt to deal with the COVID-19 crisis.

We can be sure that interest rates won’t stay this low forever. All things must end.

That doesn’t mean that profits can’t be made in the short-term, of course: George Soros, the superstar investor and liberal philanthropist, famously said, “When I see a bubble forming, I rush in to buy.”

Other concerns have been raised concerning the blockchain technology that secures Bitcoin transactions, since it requires a lot of energy in order to perform the calculations that verify the accuracy of financial records, making sure that no one can cheat the system.

For example, a recent study conducted by Cambridge University in the UK suggests that the Bitcoin ecosystem uses more electricity than the entire country of Argentina does.

Noxious gases such as carbon dioxide (CO₂) are released into the atmosphere as coal is burned to provide electricity.

That’s a monumental amount of power that needs to be generated — and it’s often produced from old-fashioned, “dirty” sources such as the burning of fossil fuels.

This is a real problem when so many people are concerned about the systemic risks of climate change, which may lead to droughts in parts of the world where it’s already difficult to grow food.

Some critics would say that Tesla’s recent investment in such a heavily pollutant-emitting technology undermines the company’s image as an environmentally-friendly brand.

They’re clearly not as green as the dollar bills that they’re making.

However, wherever there’s a chance of great wealth, there will rarely be a shortage of people interested in getting involved.

One estimate suggests that there are now around 25,000 people who have managed to become US-dollar millionaires simply through investing in Bitcoin.

They bought in at the right time and held onto their assets, allowing them to profit from the astounding rate of growth in the BTC value.

Some people have been able to amass vast riches.

There is even a select group of Bitcoin billionaires, who have reached the highest pinnacle of wealth by buying early, when the price of a single Bitcoin was thousands of times lower than it is now.

In 2011, for instance, you could buy one Bitcoin for a single US dollar. That seems all but unimaginable now.

The elusive creator of the computing technology behind Bitcoin, an anonymous person who goes under the assumed name of Satoshi Nakamoto, may be worth a stellar $40 billion.

So it’s impossible to deny that the rewards, thus far, have been immense.

Will the growth continue or are cryptocurrencies set to crash and burn? On that, the experts disagree — only time will tell.

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