Don’t believe Warren Buffett partner Munger Sr. about Bitcoin being a scam, because Bitcoin has never been a value investor’s cup of tea, just as gold has never been a value investment (Warren Buffett has forever warned investors not to buy gold), but human civilization has always held gold as a major asset.
I’ll tell you guys a simple way to value bitcoin: Global gold assets are worth about $100 trillion, if 21 million bitcoins replaced just 1% of that, each bitcoin would be valued at $50,000, which is 3 times the current price.
3. Digital currencies, as represented by Bitcoin, will go from being a fringe investment to a gradually accepted asset class in mainstream finance in 2018, for one simple reason: money, money, money effects; Wall Street exchanges, investment banks, hedge funds, etc. are all going to grab a piece of the pie.
4. Digital currencies will continue their frenetic and dazzling performance following 2017, where, despite significant volatility and corrections, their risk-reward returns settled at the end of 2018 leaving other risky assets such as equities countless blocks behind.
5. As China bans bitcoin trading, speculation in bitcoin or digital currency concepts in Chinese listed companies (A-share, Hong Kong or U.S.) will be in the name of blockchain, and blockchain concept stocks will be the theme of outliers in 2018.
6. Governments of major countries may join forces or successively launch certain regulatory initiatives on the trading of bitcoin and other digital currencies after the second half of 2018.
7. Some other digital currencies (altcoin) that compete with Bitcoin will perform better, especially some that join forces with traditional financial services or tech giants, as well as those that stand out in terms of privacy protection, delivery efficiency, etc.
8. These violent delights have violent ends.
Every U.S. bull market ends with the collapse of some type of asset bubble:
In the ’80s it was junk bonds, in the ’90s it was the Internet, and before ’08 it was the Internet. In the 90s it was the internet, before 08 it was real estate financing and derivatives, and this big bull market will most likely be digital currency and blockchain (which happens to be a combination of technology and money, the perfect pain point for Wall Street).
The bitcoin explosion that began in 2017 heralded the final phase of the U.S. bull market. If 2018 spills over into a blockchain concept theme, it’s getting closer to a bubble burst, and while we can’t predict the timing, 2019 is probably the probability.
9. Bitcoin will not go away after the bubble bursts (it will be our once-in-a-lifetime opportunity to bottom out) and great blockchain companies (second generation internet companies) will be born, just as Amazon was reborn in the last generation after the 2000s .