CryptoQuestion Bulletin — January 2021

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An Overview

2020 was one hell of a year for cryptocurrency, but there was one stand out cryptocurrency that increased its dominance over all others, bitcoin. Not only did bitcoin smash all previous highs, a feat few thought possible at the beginning of the year, but bitcoin’s market dominance is up to 70% at the time of writing. Combined with Ethereum, both coins represent over 80% of the total market cap of all listed cryptocurrencies.

In 2020 bitcoin finally achieved mainstream investment status gaining respectability among blue chip companies and institutions. The biggest news was PayPal entering the market. They recently announced that some 20% of the limited number of customers who have been offered the service have bought. Their crypto platform was opened to all its US customers in November. Considering the 350 million PayPal users there could be some huge pent up demand waiting to hit the market. According to a recent survey there are now over 101 million owners of cryptocurrency. With this unfulfilled demand and bitcoin’s legitimate status as a challenger to gold the market rally isn’t over just yet.

READ THE ARTICLE — SOLVING THE BITCOIN DILEMMA HERE — SHOULD INVESTORS BE BORROWING TO BUY BITCOIN?

One worrying observation was that some investors were borrowing money to buy bitcoin. We must all remember that bitcoin is no different to the many investments that have gone before. Never borrow to buy a risky asset. Only invest what you can afford to lose and restrict your ownership to less than 5% of your overall investment portfolio. Remember the words of Sir John Templeton “The four most costly words in the annals of investing are ‘This time is different.’”