I realise not everyone has kids, especially around the age where they’re experiencing their firsts, so bear with me and this analogy.

I still remember what it was like coaching our newborns through their very first Christmas. They have absolutely no idea what’s going on. The decorations, shrubs inside the house, the freaky old man in a red suit. As the parent, you’re almost going through it on their behalf. We know eventually they’ll love Christmas, but on the way there, they go through several paradigm shifts. As they age, bewilderment turns to wonder, then to belief and then, anticipation.

Just like Christmas, Bitcoin captures the public’s attention roughly every four years. I was like many others, drawn in by the allure of rapidly increasing value, where even a modest investment could potentially grow into something substantial. This allure isn’t unique to crypto; it’s a common motivator for first-time investors in traditional finance as well. However, in the crypto world, everything happens faster – both the gains and the harsh lessons. Since 2008, the Bitcoin cycle has operated with predictable regularity: one bad year, two moderate years, and then one explosive ‘boom’ year. With each cycle, a new wave of people becomes aware of the flaws in our current financial system and start to see that maybe Bitcoin might offer a solution.

Just like our first Christmas: Bewilderment turns to wonder, then to belief, and finally anticipation – We come for the price like kids come for the presents, but as time goes on, we realise we’re involved in something quite significant.

Since 2017 I’ve been banging on the Bitcoin drum, and it’s been a bit of a lonely crusade, knowing most people listening weren’t really that interested. That all seemed to change at the start of this year.

The Bitcoin spot ETF (Exchange Traded Fund) approval, the pro-crypto stance adopted by US politicians, and rumors of nation states adopting it as strategic reserves. Each cycle brings a different set of catalysts, but the outcomes always the same – number go up.

A lot of the voices in traditional finance are starting to wake up now, too. Since 2017 I’ve receive many online comments and emails from people critical of my pro-Bitcoin stance.  Not so much these days, but 7 years ago, the thought of a financial adviser coming out in support of crypto was very much ‘fringe’ to say the least. In New Zealand this isn’t surprising, where mainstream media still functions as the number one financial adviser for the masses.

Returning to the Christmas analogy, every year brings with it a new trend, a must-have toy, or gadget that captures everyone’s attention. Typically, the innovator behind such an idea reaps the financial benefits from marketing and selling the novelty. Really good ideas turn into really good business, and when we invest in them, we participate in some of the profit. Investing in business is essentially purchasing a machine that prints money, through the cash flow it generates.

Another form or money printing is to own a bank – that’s a little easier said than done in traditional finance of course, but with Bitcoin, many things are now possible. A digital asset with inherent scarcity, provides the chance to become our own bank, because it allows us the absolute right to directly own something of immense value. Right in your wallet, completely under your control, is the opportunity to acquire a new type of capital, that could become infinitely valuable in the future.

The only question is, are you ready?

So 3 things to think about if the answer is yes, and you haven’t made a start yet

  • Ignore the price of Bitcoin – The dollars we use are printed out of thin air by the banking system each time we, or the government, takes out credit. Modern day [fiat] currency is manipulated by government and central banks to influence and control the free market economy. There are immense negative side effects of this (for another day), but the point is, Bitcoin cannot be interfered with in the same way.  The fact Bitcoin rises in price then, is due to an infinite, unstoppable supply of fiat currency colliding with a finite, immovable supply of digital scarcity. We are still very early.
  • Dollar cost average. It’s hard when Bitcoin’s been positioned as a high-risk, speculative investment, but in my view, this isn’t for speculation – Bitcoin is a savings technology. One of the best decisions I made early on with Bitcoin, was dollar cost averaging (the act of investing the same amount of currency no matter the price). I set up an account with Easy Crypto to buy it, and each week I bought the exact same amount over about 4 years and sent it to my digital wallet. Given that I’m investing with a long-term perspective and Bitcoin exhibits extreme price volatility, adopting this strategy is the most prudent approach to prevent an obsession with price and resist the temptation to engage in speculation.
  • Finally, hold Bitcoin in your own wallet. Yes you can invest through other investment vehicles now, like ETF’s and even KiwiSaver, and for tax reasons, this should be something to consider, but Bitcoin is for more than just ‘number go up’. One of the unique benefits of owning any type of crypto, is that you can be your own bank. This means you can own something of value, and send or receive it, with other people, directly, without government interference or red tape.

Like our first Christmas, we have no idea when first coming to into this space what’s going on. Eventually the emotions kick in and like a kid guessing the present, over time we start to anticipate what comes next. Learn more, the more you hold, and remember, this isn’t for speculation, it’s for long-term wealth.

To help get you started, consider taking these 3 steps:

  1. Take the free, 5-part online course Crypto 101: Crypto with Confidence,
  2. Sign up here to Easy Crypto, to buy Bitcoin,
  3. And download the Exodus wallet.

Education is critical for understanding the essentials like setting up your wallet, being vigilant against scams, and ensuring you have a well-thought-out investment strategy, so do your own research. If you’d like to learn more about how I can provide advice in this space, or assist with an intergenerational Bitcoin wealth strategy, reach out.

In the latest Everyday Investor podcast, I talk with Sarn Elliot, crypto consultant -we’re talking about how to ‘be your own bank’.