The law of scarcity states that the increase in perceived value plus the sense of urgency equals buying power. Supply and demand play a huge role in influencing the perceived value of a product or a commodity.
If we compare Bitcoin to the hype of Birkin bags, then you’ll see how the value never decreases. With time, the scarcity of Birkin bags matched with the price and the allure of its store value makes it an excellent investment choice. It looks good in any portfolio.
According to The Attitudes Survey conducted by the Knight Frank Luxury Investment Index, luxury handbags topped the list of collectibles, growing owners’ wealth by 13% since last year. When it comes to sound investments, this luxury item proves increases and growth YoY.
You don’t carry a Birkin bag unless you want to flex. Keeping its leather in mint condition and its signature lock scratch-proof and shiny is what makes the bag appreciate. The same theory can be applied to bitcoin. The point of having such an expensive asset is not to buy and sell, committing arbitrage with a large amount of money that keeps you up at night. The true philosophy of luxury is the fact that only a few have access to it. Acquiring such assets is a strategic art. Just like the ways in which we invest in Bitcoin and also various cryptocurrency projects. They all have a backstory. When you navigate the Hermés site, there are dozens of pages worth of information about the brand.
One thing I love about cryptocurrency and Bitcoin is that they offer an incredible new way of doing business globally. It speaks internationally by default. There are no barriers when it comes to the speed of money. I’m incredibly bullish right now even though we’re experiencing a slight dip from BTC’s all-time high of $59K.
This is the volatile part of Bitcoin if you lack the education. When you don’t DCA, you may risk losing fiat money you care about and perhaps absolutely need at a hard moment. This is what the Bitcoin Maxies warn us about when they talk about getting burnt. Committing arbitrage with money you can’t stand to lose will keep you up at night. I never want to over-invest, trying to short the, so I’ve only been investing when I get the urge to order Uber Eats or I don’t get to buy a Telfar bag from pre-sale. I simply re-direct those funds to somewhere else.
Life is not always about spending money. The end goal should be about earning more for your money when it’s saved or invested. I’m trying to break this cyclical habit of spending so much money, that the bank is slow at calculating my balance! Growing up, banking and having credit cards felt like a game I was not good at winning. With the efficiency of digital currency and its appreciation, I feel like this is the reset I’ve always needed. With mass adoption quickly coming thanks to the more women and transparent marketing campaigns in the space, Bitcoin is only going to grow in the community.
All the highs and lows of this journey make me think of my tribulations. What is purchasing power in the age of Crypto? As the increase of Bitcoin races through the blockchain like Mario Kart, the decrease in the dollar becomes more evident. Corporations are buying in at massive rates with pressure from their clients to take a position. Citibank released a 108-page report about the tipping point of Bitcoin. Among so many notable facts, 35% of small businesses used cryptocurrencies in 2020. That’s huge! The way small businesses have been so greatly affected by the pandemic has hit our global workforce hard. So it’s no surprise that the use cases of bitcoin and other cryptocurrencies are having their superman moment.
“The entrance of institutional investors has sparked confidence in cryptocurrency but there are still persistent issues that could limit widespread adoption. For institutional investors, these include concerns over capital efficiency, insurance and custody, security, and ESG considerations from Bitcoin mining. Security issues with cryptocurrency do occur, but when compared to traditional payments, it performs better.” Source
This is why Bitcoin is the perfect storm for disruption and advancement. If we've learned anything from 2020, it’s that the systems that we’ve followed for so long are breaking down and no longer useful to operating in the future. New ways of trading and buying goods and services are creating new lifestyles. You have different people holding bitcoin in every single stage from 2009 to the present day. And now that corporations are setting their strategies, buying like whales, and speculating like crazy on how to even regulate this sea of digital creatures, I’d be crazy to tell you that this is just a trend.
* Disclaimer: This is not an attempt to give financial advice. Do your own research.