What are GoalVest's views on Bitcoin as an investment
11/19/2024
Bitcoin is the first widely adopted digital currency that operates without a central authority like a bank. It allows secure, peer-to-peer transactions, and has a fixed supply of 21 million coins. While there’s ongoing debate about its true utility and disruptive potential, our focus is on how it behaves in the market and its investment appeal.
We see Bitcoin as a demand-driven asset. Unlike traditional investments, it doesn’t have earnings, dividends, buybacks, or a widely accepted way to measure its value. This means Bitcoin’s price is shaped largely by factors like investor sentiment, the overall economy, regulations, new buyers coming in, and the money supply. As the chart shows, Bitcoin’s total market value recently passed silver, placing it among the top 10 most valuable assets or companies—although it’s still well below gold.
Why We See Growing Demand in Bitcoin:
The Bitcoin ecosystem is growing, with big investments in technology and infrastructure, like computing power and utility costs.
Wall Street is showing more interest, with major players like BlackRock launching Bitcoin ETFs. While it's not yet a big focus in wealth management, momentum is building.
Some companies are starting to add Bitcoin to their balance sheets as a strategic move, like MicroStrategy and Tesla.
Bitcoin has a dedicated and growing group of supporters, particularly among younger generations. The recent election of President Trump, who has shown openness to Bitcoin’s potential role in the financial system or as a reserve, has added more attention.
Why We See Bitcoin as a Riskier Asset:
Bitcoin often faces sharp drops during major black swan events, like wars or economic downturns.
It tends to struggle during periods when financial conditions are tighter.
Many people invest in Bitcoin for quick profits, which increases its price swings.
In summary, Bitcoin is a highly volatile and risky investment, with a history of large price corrections—sometimes over 80%. But for those comfortable with taking on higher risk, this volatility also means there’s potential for significant returns.
Our investment philosophy aims to provide our clients with diversification, and safety along with growth. We have a dual mandate to grow our clients assets while at the same time, protecting their hard earned fortunes. Bitcoin, with its high volatility, still uncertain path and difficulty of valuation, is not an investment we are prioritizing. However, we acknowledge the factors driving Bitcoin's rising value, and if you’re interested in discussing further, please let us know.
Sources: companiesmarketcap
Disclaimer
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