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Research Outline

Prepared for Abhinav R. | Delivered November 1, 2019

Bitcoin

Goals

To understand how Bitcoin will be changing in the next 3-5 years, including information on whether it will be the strongest in the cryptocurrency market, how it will (or won't) prove to be better than traditional U.S. currency, and investment strategies to take advantage of these changes.

Early Findings

Future of Bitcoin

  • Venture capitalist Jason Calacanis predicts that Bitcoin is likely to be replaced by a new technology, causing its price to fall.
  • Lars Seier Christensen, the chair of next-generation decentralized computer Concordium, believes the national governments, seeking to protect their profits from printed currency, will quash Bitcoin's efforts to become a mainstream currency.
  • Others, such as Blockchain Studio CEO Corentin Denoeud, believe the fact that governments are even discussing cryptocurrency speaks to its progress.
  • Among cryptocurrencies, Bitcoin is the most popular, accounting for nearly 70% of the market.
  • Fully 89% of survey respondents said they know what Bitcoin is, and several mainstream establishments, such as Starbucks and Nordstrom, accept Bitcoin payments.
  • They cryptocurrency market is beset by a series of high-profile exchange hacks and regulatory concerns, making many investors leery of taking the plunge.
  • A recent Forbes article states that Binance Coin (BNB) and Chainline (LINK) are outperforming Bitcoin, as of October 2019.
  • An article at CryptoSale says the dollar has lost almost 99.99% of its value against Bitcoin.

Bitcoin Investing

  • Jason Calacanis suggests that investors should keep their Bitcoin investing to an amount they are willing to lose, since he predicts a decline in the market. He recommends investing no more than 1-5% of net worth.
  • Due to challenges around Bitcoin ownership and storage, investors can either use a digital wallet or a custodial service to store Bitcoin.
  • Bitcoin investors are encouraged to do their research, start small, diversify (invest in multiple cryptocurrencies), use a cold (offline) wallet, and prepare for volatility.
  • Experts caution that Bitcoin investing is highly speculative and part of an unregulated market, meaning investors "should be prepared to lose their entire investment."