Bitcoin about to embark on parabolic stage of bull market - does retail even know?

Bitcoin is manoeuvring into position to retake the all-time high. Once there, it looks like the intense stage of the bull market can really get started. The vast majority of retail is still not clued into this. Will retail arrive late as usual?

Bitcoin created to provide lifeline

Bitcoin was created in order to give the average Joe and Jane a lifeline out of a grasping monetary system, run by the banks and for the banks. Since its creation, as well as providing a safe alternative to the preposterous excesses of currency printing, bitcoin has returned thousands of percent in gains to those who just bought and held for the long term.

While bitcoin was providing this over the last decade or so, central banks around the world were printing currency for free with gay abandon. Not many people understand how our debt-based currency system works. Who would know that as more currency is printed in order to pay the interest on the towering debt, the currency in circulation is diluted more and more, meaning that your currency is worth less and less.

Everyone knows that prices are going up faster than wages can keep up. It seems that the more you work, the less able you are to pay for everything that is needed. You are on the hamster wheel, and you have to increase the speed or face going under.

Mainstream media prints what it is paid to

And then there are the lies. Mainstream media faithfully prints what it is paid to. For years now, the public has been told that bitcoin is bad. It is for money laundering only. It is for terrorists to fund their evil causes. Anything that is wrong in society - bitcoin funds it.

It’s like saying that water and air are bad because terrorists drink and breathe it. The vast majority of financial crime takes place through use of the dollar. Bitcoin is very unsuitable because it leaves a trail that can be followed. Why would terrorists use this?

The public likely doesn’t know that nobody runs bitcoin. It runs itself. It is code - impervious to what governments or international financial agencies do or think. The bitcoin network just continues to churn out around 900 bitcoins on a daily basis, soon to become 450 when the halving takes place in April.

Why does retail get burned?

So why did so many retail investors get burned with the last bitcoin bull market? It is because of a lack of education. Nobody needs to be, or should be a trader when it comes to bitcoin. It just needs to be held, and the longer you hold it, the more value it accrues. 

The problem with retail is that the negative press keeps the average investor out of buying bitcoin, until the point where everyone notices that this asset is going parabolic. Everyone then feels they have to jump on to that green towering candle or face missing out.

This is the point when the experienced traders and the institutions start selling into the huge amount of liquidity that retail buying brings. Of course, once they have sold everything, the bull market is over once more, and the price begins to crash. Poor retail investors are left holding bitcoin that is fast diminishing in value, so they sell at a loss, bitcoin enters a bear market, and the whole cycle starts again.

How does retail get ahead?

How then can retail get ahead? The only way, if you are not a trader, and it needs to be remembered that more than 90% of traders lose money in markets, is to buy bitcoin a little bit at a time, and just hold it for the long term.

Bitcoin does not have to be a trading asset. In fact, it shouldn’t be. This is the ultimate scarce asset. Even gold has inflation of 1 to 2% a year as further production is mined out of the ground. So if you hold gold for ten years, you will lose a large chunk of your wealth.

That said, this is nothing compared to holding fiat currency. This can be compared to an ice cube that is too close to a raging fire. If this is where you store your wealth, it will not take many years to lose the majority of it.

Therefore, holding bitcoin, with a time horizon of at least ten years, is probably a sensible way to go. It’s only by comparing all other assets to bitcoin that this becomes clear. 

Finally, what anyone writes in an article, especially if it is on the subject of finance, should be treated with the utmost suspicion, until one does their own homework on the subject. This might take a while, so it would be good to start soon.

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.