[고란] In the era of 30 million KRW of Bitcoin, it refers to the accumulation type investment.

[고란] In the era of 30 million KRW of Bitcoin, it refers to the accumulation type investment.

[고란의 어쩌다 투자] Bitcoin is back. In fact, to be precise, Bitcoin has always been there. It’s just that Bitcoin has gone out of our minds. Although the bitcoin price has exceeded 30 million won, people are not interested. According to Google trend analysis, Bitcoin search volume reached 100 in January 2018, but only 20 in December 2020 (as of December 20-26). It is also the case when looking at human indicators. From the end of 2017 to the beginning of 2018, we talked about bitcoin when we gather. Where is it now? Stocks and real estate dominate the conversation. People seem to be interested only when the bitcoin price has crossed its previous high. However, the pace of interest is not the same as before. Since everyone burned greatly in 2018, investment is cautious. It’s because if you hold the tap for nothing, you might have to endure at least three years of recognition. I’m cautious, but I’d like to offer you a suggestion, how about taking interest in bitcoin again. It’s so expensive, but still be interested in bitcoin… . I don’t think there is one or two that I want to ask right away. So, I summarized the possible questions into four. I hope you look at the answers and come to a conclusion whether it is okay to be interested in Bitcoin again. 1. What is the value of Bitcoin that can’t even buy a cup of coffee?’Unfortunately’ Bitcoin in 2020 has turned away. In November 2008, Satoshi Nakamoto presented the idea of ​​bitcoin through a white paper,’A Peer to Peer Electronic Cash’. I dreamed of a global currency that allows individuals to freely trade without going through a centralized institution (bank). That’s why the name is also a combination of’Bit (the smallest unit of information used in a computer)’ and’Coin’. The reason why we put the effort into naming is because we believe that names can dictate a person’s fate. Bitcoin is the perfect match. Because of his name (?), he has suffered various sufferings for over 10 years since his birth. When people first heard the word bitcoin in 2017, they came to mind, of course, money, or currency. There are three functions of currency. A medium of exchange, a measure of value, and a means of storing value. However, these three functions of money only appear in textbooks. When you ask what the function of money is in reality, you naturally think of the’media of exchange’. It’s a daily routine to buy things with money. Looking at the name, Bitcoin is definitely money, but it is not inconvenient to use it in everyday life. Block generation takes 10 minutes, so if you are unlucky, you have to wait 10 minutes for payment to be completed. Because of this limitation, there was a lot of resentment that’with bitcoin you have no choice but to buy cold coffee.’ In 2020, three years have passed since the first intense meeting with Bitcoin. No one asks or ponders how to buy coffee with bitcoin among market participants. When a stranger (?) who is not interested in bitcoin attacks the limit of bitcoin, it makes a big deal like this. “Who is going to a coffee shop with a gold bar to have a cup of coffee worth 5,000 won?” Satoshi may feel sorry for hitting the ground when he sees the current reality. In the fire market again in 2020, Bitcoin is not a’media of exchange’. Rather, it has established itself as an asset rather than currency, specialized in’means of value storage’. Gold is an asset that has faithfully served as a means of storing value for hundreds of years. So, in 2020, Bitcoin is called’digital gold’. 2. Gold is valuable, but what is the value of bitcoin, which is only a piece of data? The demand for gold is largely divided into processing demand and investment demand. Processing demand is divided into jewelery demand and industrial demand, both of which require’real’ gold. In this case, everyone will nod to the proposition that’gold is valuable unlike bitcoin’. But if gold is worth it because of the actual processing demand, why at some point will the price of gold soar from $1000 to $2000 per ounce and then drop back to $1500. If gold prices move because of processing demand, it is difficult to explain the actual gold price fluctuations. It is investment demand that determines the price of gold. There are two’incidents’ in which gold prices have historically jumped. One is the’Nixon Shock’ in 1971. The US, which could not afford the huge fiscal deficit from the Vietnam War, unilaterally abolished the conversion system between the dollar and gold. I need money to fight the war, but because the value is fixed at ‘1 ounce = $35′, I couldn’t take money at will. So I declared that I couldn’t change it for gold even with dollars. It was a measure that would remain enough even if it were a normal country to declare a moratorium, but as the superpower of the United States did (?), the world economy is adapting to the era of collapse after a brief shock. From that time on, the United States has acquired a’cheat key’ that allows you to print money freely when necessary. As the dollar releases in the market, scarce gold prices soar. The second is the advent of gold ETFs in 2004. I know that gold has investment value, but it is not inconvenient when investing. There is a risk of storage, and it is literally too heavy when giving and receiving gold bars. Gold ETFs (Listed Indices Fund) made such gold into an easy-to-invest financial product. As investment demand surged through gold ETF, the gold price leveled up again. Calling Bitcoin as’digital gold’ is a result of focusing on the aspect of investment demand. In terms of investment demand, gold, which is a scarce resource, is similar to Bitcoin, which can only be mined 21 million. Moreover, you can prove possession anywhere in the world by knowing your private key, and it can be transmitted in real time. Bitcoin is an asset that is more specific to investment demand than gold. 3. Let’s say yes. Bitcoin surged in 2017 and then plunged in 2018. Again, it is said that the market’s most vigilant moment in the market is when the word’This time is different’ comes out. This is because they cry out for being different this time, but usually lead to a decline that says’it was this time’. Nevertheless, I would like to say that this time it is different. What’s decisively different is what drives up prices. While 2017 raised prices as individuals started to buy back and forth stock in Fear Of Missing Out (FOMO), in 2020, institutions approaching portfolio diversification as inflation hedge assets are pushing prices up. The general atmosphere of the market is that there will be no sharp decline as long as they continue to buy. Specifically, institutional investors can be classified into 4 categories. First, it is a family office represented by grayscale or a small private equity fund. Several studies on asset allocation show that including even a very small amount of bitcoin in your portfolio can increase your expected return and lower your risk of loss. So, when I tried to invest in bitcoin to increase the efficiency of the entire asset under management, it was not one or two that I liked. I would like to know what to do with an exchange that has been established for less than 10 years, rather than a financial company that boasts decades and hundreds of years of tradition. If you forget the news that the exchange has been hacked, you will hear it. Even if you bought bitcoins through these exchanges, you are not sure how to store them. Although the IT-related knowledge is not abundant and the scale of operation is not very large, it is burdensome to use a separate expert to store digital assets. In this case, the place to go is the grayscale. Grayscale is a digital asset manager. When investors entrust their investment to Grayscale, Grayscale buys bitcoin with that money, and gives investors a certificate of investment in bitcoin (GBTC). GBTC is legally like stock. The KSD manages this deed, and GBTC is regulated by the US Securities and Exchange Commission (SEC). Investors do not need to lose the transaction risk arising from bitcoin investments as long as the price fluctuation risk is overcome. With this explosive increase in investment demand, the average number of bitcoins bought by Grayscale per day in November 2020 exceeded 1000. Considering that about 900 bitcoins are mined a day, grayscale is sweeping more bitcoins than the amount mined. The second is Wall Street’s big hands. Started to be incorporated as part of the portfolio. Renaissance Technologies, a global hedge fund, known for having a return of more than 100 times Warren Buffett’s’quantity investment’, started investing in Bitcoin in April 2020. Billionaire hedge fund manager Paul Tudor Jones said in May that he was buying bitcoin against inflation, and in August he even made a statement saying, “I regret not buying more (Bitcoin).” Billionaire investor Stanley Druckenmiller, who served as the right arm of George Soros, the’godfather of hedge funds’ in the past, said in November that “we have bitcoin in our investment portfolio.” Guggenheim Partners, an investment advisory firm known as the owner of the Los Angeles Dodgers, also announced that it will indirectly invest in Bitcoin through Grayscale. It’s not Wall Street’s big hand if you think about it, but insurance companies, who are the end players of institutional investors, also started investing in Bitcoin. Mass Mutual, a large U.S. insurance company with assets under management of $235 billion, announced in December that it had invested $100 million in Bitcoin through a digital asset manager called NYDIG. The third is corporate. When a company makes money by doing business, it makes new investments or pays dividends to shareholders. If there is a need to raise money just in case, it is accumulated in the company in the form of in-house reserves. One of the most common ways to roll out in-house reserves is to invest in stable government bonds. However, there are companies that broke this practice and boldly started investing in bitcoin with in-house reserves. Nasdaq-listed software company MicroStrategy invested about 80% of the company’s cash equivalents, or $425 million, in Bitcoin over August and September. “Bitcoin is valuable as a store of value,” said Michael Sailor, CEO of the company. We plan to make long-term investments.” They even issued $650 million worth of convertible bonds, and soon went out of debt to buy bitcoins. It is literally betting the company’s fortune on Bitcoin with the’heart of the beast’. Thanks to the CEO’s (so far) wise investment decision, the stock price from under $150 in September soared to $370 from the closing price on the 28th with a rise in Bitcoin price. Finally, there is Paypal. In fact, what has triggered the rise in the Bitcoin trend that has continued since October is the news of PayPal’s support for Bitcoin trading. PayPal is a simple payment service used by 350 million people around the world. The fact that PayPal supports Bitcoin transactions means that 350 million people can easily buy Bitcoin. In Korea, it is not difficult to buy bitcoins with fiat currency (won), but there are not many exchanges overseas that accept fiat currency deposits. Even if it is, you need to create a separate exchange account to buy Bitcoin. It’s not bothersome. However, it is possible to buy bitcoin with one click through the PayPal app already installed on the smartphone, which really opens the way for bitcoin popularization. It is already heard that the size of bitcoins bought a day through PayPal is equal to the amount of mining per day. Since it is coming in, it is classified as one of the pillars of increasing the number of institutions). 4. So, have you (I) succeeded in investing in bitcoin? If you want to invest, how do you invest? The report card is not bad. In terms of return alone, it exceeds 100%. However, the success or failure of an investment is not a return, but a profit. The proceeds themselves are not very large, as it was not a huge amount of money in the first place. Even though the rate of return itself exceeds 100%, it is quite high, but that is not enough to quit the company as an investment jackpot. The price of Bitcoin reaches around 30 million won. As you may have noticed, it is difficult to achieve a life reversal by investing in bitcoin now that it has risen 30 times from the past when it was not even 1 million won. Soon, now is the time to approach Bitcoin from the perspective of’investment’ rather than’speculation’. You need to put bitcoin into your investment portfolio as a layered asset such as deposits, stocks, real estate, etc. For the reasons I mentioned earlier, I believe in Bitcoin’s long-term idolatry. In the short term, there will be fluctuations, but in the long run, I expect it to rise someday. If you are the same as me, we recommend you to invest as a specific investment method. Actually, I also bought bitcoin for around 30 million won and around 3 million won. When I think about it now, I should have bought it because it was’young,’ about 3 million won, but at that time, I was more afraid that there was an underground basement than I expected to go up. If you cannot live because of this fear, it is really a loss. On the contrary, if I had a full purchase with the joy of 30 million won, I would have lost the opportunity to buy it cheaper. So, just like putting in savings, we recommend buying bitcoins with a certain amount off when you get paid. You may not be able to reverse your life, but you can easily invest. Even though the bitcoin price is about to recover from its previous peak, the atmosphere of the domestic coin community is not very bright. This is because, compared to the global average, domestic investors have an exceptionally low share of Bitcoin investment. Soon, the proportion of altcoins investment is too high. If you think about why, it may be because, as I mentioned earlier, life reverse is impossible with bitcoin investment. It seems that there are a lot of people who are investing with the mind of’I will definitely change the cutlery class’ since they have entered the coin board. I will leave only one last word for these people. If you plan to eat 10 times, you should be prepared for 10 pieces. ※(January 2021) ‘[경제이슈] This article was written by revising information such as price according to the current point in the column titled’Bitcoin exceeded 20 million won, why it is different from 3 years ago’. ※I am currently investing in Bitcoin. All investment decisions and results of investments are the responsibility of the investor. Reporter Goran Joindi