For the past few weeks, cryptocurrencies like Ethereum, Dogecoin, and Shiba Inu coin have dominated financial news. They have rapidly risen in value and even made it onto Saturday Night Live. But I want to remind you about these upstarts’ predecessor, the relatively staid and even a little bit boring original cryptocurrency, Bitcoin.
Yes, I said it: Bitcoin is boring.
But boring isn’t bad. In fact, from an investor standpoint, boring is excellent.
(I own a position in Bitcoin. I am the founder and largest shareholder of Ballet, which makes hardware wallets for cryptocurrency. I have a position in Tesla, which has holdings in Bitcoin. I am an investor in Hilt, which operates Bitcoin ATMs. I am also an investor in three venture funds—Ribbit Capital, Blockchain Capital, and Sky9 Capital—that make some investments in Bitcoin-related companies.)
In the 12 years since its creation, Bitcoin has become the blue-chip stock of the emerging cryptocurrency asset class—not merely the safest investment in the space, but the one most likely to be around in the long term. It is by far the most used digital currency worldwide, with about half a million active users engaging in at least 300,000 transactions each day. And it is still the best store of value among crypto assets by a long shot, accounting for roughly $1 trillion. There is no reason to believe it won’t continue to be used by more and more people, and gain in value, as time goes on.
Sure, there are still dips in its price, including a massive one on Wednesday. But, given the world we live in today, a store of value that Bitcoin provides is not simply necessary, but increasingly part of the fabric of the global economy. It’s a matter of when, and not if, Bitcoin becomes mainstream. As the old expression goes, you don’t want to buy the fruit when it’s already ripe; you want to buy it just before.
But getting in early takes some commitment and legwork, which, again, points to Bitcoin’s tremendous upside. Bitcoin’s total value has already reached over 10% that of gold. If it eventually comes to rival the largest asset classes in the world—real estate and equities—it will be 100 times its value today.
I’m often asked why I invest in Bitcoin, and I say what I recently told my friend. He has a young daughter, and he was worried about saving for her future. One day, she will turn 18. How can he send money into the future, to make sure his daughter has the things she might want at 18? A car? A prom dress? A college education?
This is the heart of why everyone saves money and makes investments—to transfer value into the future—and Bitcoin is simply amazing at it, because it has a limited issuance. There will only ever be a finite number of Bitcoins created (21 million), so the prospect of its value increasing, or at least holding steady, is tremendous.
When I first mined Bitcoin in 2011, hardly anyone outside the founding circle and some other technology adventurists had even heard of it. Two years later, I left a comfortable corporate track to buy into an unknown business in an unknown industry. I had a strong conviction that Bitcoin would change the world. I continued adding to my Bitcoin because I believed the price—less than $10 when I started—was bound to skyrocket. I refused to be cowed by its volatility.
When Bitcoin dropped in the pandemic-induced economic collapse in March of 2020, I saw the opportunity to buy more at a price that may never reappear. In the future, when there are new drops from panic selling, I’ll likely make the same decision to buy the dip. And when Bitcoin reaches levels at which I will achieve the profitability to which I believe every Bitcoin owner should aspire—at least 100 times the initial investment—then I’ll also be willing to sell and take profit, rather than following the hordes who jump in at every increase.
The big lesson for the would-be Bitcoin investor is this, which looks a lot like any other traditional investing advice: If you study an investment carefully and invest with patience, it can pay off.
Bobby C. Lee is the founder and CEO of Ballet and author of the new book, The Promise of Bitcoin: The Future of Money and How It Can Work for You.