Bitcoin is Not a Stock!

Bitcoin is not a Stock. It doesn’t represent a corporation. It doesn’t produce income, report earnings, or have a CEO. Anyone, including Warren Buffet, who tries to analyze Bitcoin as a stock will clearly miss its value.

Bitcoin’s price is a number that can be watched like a stock and charted like a stock. Maybe this is what confuses people.

But the US Commodity and Futures Trading Commission has rightly ruled Bitcoin as a commodity, putting it in the same classification as gold, silver, and oil. This labeling holds true for other public blockchains like Ethereum as well.

What this classification substantiates is that Bitcoin a digital representation of sound money principles, with its analog counterpart being gold. Sound money is a place where one can store wealth without concern of the underlying unit of measure inflating away purchasing power over time.

Bitcoin’s value won’t go up with more products sold, profits made, or any corporate acquisitions. No, Bitcoin goes up when smart people take action to preserve their wealth after looking at the macroeconomic environment and realizing that their cash is losing value at an increasing rate due to the necessary and continuous government stimulus just to keep the economy afloat during these hard times the pandemic has accentuated upon us. And currently, this is what a growing number of American institutions have been doing, being the primary cause for the recent rise in BTC price.

So where is this all going?

Nobody really knows. Though, we do know that in almost every example, the digitized version of a product usually surpasses its analog counterpart by a long shot. In this instance, Gold has approximately $10 trillion in stored value while Bitcoin at its current all-time high is $650 billion, meaning it still needs to appreciate 20 times in value to surpass the market gold sustains. But, why would it stop there when we know there is essentially $100 trillion in representable, inflatable Government-issued fiat currency? Who will want to hold those hot potatoes at the end of the day?

Bitcoin doesn’t have to do anything to gain value. It can just keep running, settling transactions, and updating its blockchain every 10 minutes while the total money in the world seeps in seeking a safer way to be preserved.