In investing, what is comfortable is rarely profitable and several findings support this popular claim. Back in 2014, a study The Digital Dividend-First Mover Advantage, published by Harvard Business Review Analytic Services and sponsored by Verizon Enterprise Solutions, found that early adopters of technology—in finance or otherwise, are more likely to experience better business outcomes in terms of revenue and market position.
Needless to say, Bitcoin is a success story for early adopters and has clearly put this assertion to test. Like it has been the case in anything potentially disruptive and against status quo, Bitcoin faced a lot of opposition in early days with some even claiming that the peer-to-peer cash payment system is too libertarian, too rebellious and a tool for money laundering. It is 2018 but some critics, as the London-based entrepreneur Jez San even say, Bitcoin is “is way too hard to use – it’s so user unfriendly that the man in the street just can’t use it”.
On the other hand, evangelists such as the Winkenvloss Twins who have since made billions and are known serial investors, believe Bitcoin is a trillion-dollar asset waiting to blow up despite price roller-coaster ride since inception back in 2008.
A Bitcoin Success Story
Bitcoin prices have been volatile to say the least. And it was even worse in the early days because despite retailing for cents, liquidity was shallow. Luckily, operators were technology lovers not speculators. In 2011 for example, Bitcoin was cheap retailing at around 30 cents apiece.
An initial purchase of $100 would turn in around 333 BTC. At current market rates, this investment is worth $2.131 million at $6,400. But, since the markets are down 70 percent from their peaks, this $100 purchase would have been worth a massive $6.66 million in late 2017. This $0.30, $1,000, $6,000, $20,000 and $6,000 rise and falls are the hallmarks of a volatile market.
Though the rise has been precipitous, the path has been murky to say the least. And not surprising, those who bought their coins when it was worth cents are not bothered. They have been in the game for a while now they are used to the eruptions and resulting cool-offs.
Take Marshall Hayner for example. An earlier adopter who took a chance with the fledgling technology and started mining Bitcoins back in 2009. He remains a staunch believer of Bitcoin and even with mild market moves, he believes Bitcoin is still a winner:
“I have seen these run-ups and drops in bitcoin and I did not even flinch as a believer in this technology. I really believe that bitcoin is the next digital gold” he told Reuters.
His overview is confirmed by Daniel Peled, an Israeli Entrepreneur who is happy regardless of the next turn of price.
The Trillion-Dollar Market in Waiting
While price and resulting market caps of digital assets are important, investors and traders alike should look at other metrics like use and adoption rate. Bitcoin might be facing some opposition in certain areas because of the global, decentralized nature of its underlying technology. Add that to the fact that money is involved, governments are clamping down on rogue elements. To some degree, this hampers adoption.
But behind it, its infrastructure is flourishing. As the market tapers off and finds support at $6,000, Bitcoin is poised to take off. This is more so the case once a regulatory balance is struck and developers devise efficient solutions such as the Lightning Network that allow payment channels with micro-transactions at near real time settlement.
Merging all these factors it is easy to see why Bitcoin is here to say. In years to come, it could quickly turn into a store of value or a medium of exchange. Regardless of what it becomes, early investors, or even those that get in now could be set to reap big rewards.
Image from Shutterstock