- So for those of you
who are alive in 2017 which should be everyone
watching this video, you must remember the crypto
mania of three years ago. As we were sitting down ready to enjoy our Thanksgiving dinners, Bitcoin was surging past 8000,
9000 even $10,000 per coin. And at this point all of us
youngsters were at the table telling our grandparents
and family members how they needed to go out
there and buy some Bitcoin and be part of the future. And then just before Christmas, all of us who invested
in Bitcoin we're ready for our financial dreams
to finally come true. We had all secured a stake in the future, we convinced our family
members to do the same, and we were ready to
make millions of dollars. But then before Christmas of 2017, Bitcoin came crashing down. It hit a peak of over $19,000 before the unraveling began shortly after. In fact, by Christmas day of 2017, Bitcoin had already tumbled
from the high of over $19,000 to below 15,000 per coin and then eventually that price retracted to around $3,000 per
coin just one year later. And of course, this inevitably
made the Christmas of 2018 a little bit awkward, because if your aunt Julie
went out and bought Bitcoin during Christmas of 2017
well, one year later, she would have been down
around 80% on that investment. So fast forward three years to today and it would appear that
we are repeating history, Bitcoin is surging again
past 17,000, 18,000 even $19,000 per coin
approaching that all time high, going into Thanksgiving of 2020. In fact, the prices are so wild right now and moving so quickly,
it's entirely possible that Bitcoin makes a new all time high before this video is even posted. So the question becomes, is this bound to be the
crypto bubble of 2020 just like 2017 or is this time different? What I'm going to be doing here is sharing my overall thoughts on what is driving this
cryptocurrency rally, whether or not I think it's a bubble, and then I'm going to be revealing my actual cryptocurrency portfolio to show you guys exactly what
I have invested in Bitcoin and other cryptocurrencies. Lastly guys, if you wouldn't
mind just taking two seconds and dropping a like on this video. Anytime you mention Bitcoin
or cryptocurrency on YouTube, you're pretty much guaranteed to get hundreds if not thousands of dislikes, just because this is a
very polarizing topic. So if you don't mind guys, a thumbs up really goes a long way for the almighty YouTube algorithm. So before we get into my thoughts on the 2020 cryptocurrency situation, let's take a deeper look at
what happened with Bitcoin back in 2017. Well, the main thing to understand here is that three years ago, the surge in Bitcoin and
other cryptocurrencies was driven by retail investors. And for those who are not familiar, retail investors are
people like you and me, it's individuals who are buying assets for their own personal portfolios. institutional investors,
on the other hand, are actually managing other people's money and buying assets on their behalf. A couple of examples of this
are mutual fund managers, pension managers, and
even endowment managers. Basically, back in 2017, it was your uncle or the
mailman buying Bitcoin it wasn't Wall Street and these large institutional investors. And unfortunately, without
adoption or acceptance from these big Wall Street
institutional investors, Bitcoin was doomed for failure which is why we saw that subsequent crash. You see, retail investors have
a much shorter time horizon, they wanna get rich quick and when things start to go against them, they're very quick to go out
there and sell investments and liquidate everything, I am pretty much go completely crazy which is what happens with
the stock market as well. As soon as cryptocurrency
prices started to go down, millions of retail investors panicked and decided to sell
their positions as well. And then of course, we know
where the story goes from here, Bitcoin went to a low of around $3,000 but over the last couple of years, it has slowly been returning
and growing in value and then all the sudden we
find ourselves back near that all time high of 2017. However, this time around things are completely different than 2017, and let me tell you why that is. First of all, the biggest
difference between the crypto rally of 2017 and 2020, is the type of customer that's
actually purchasing Bitcoin. You see, as mentioned earlier, in 2017, it was mostly these
smaller retail investors that were purchasing Bitcoin and ultimately driving up the price. The Wall Street investors and
the institutional investors were kind of waiting on the sidelines to see what happened, to see whether or not
Bitcoin would stay around. Well, now it's not just retail investors, it's a combination of the
smaller retail investors, as well as these larger
institutional investors on Wall Street that are
scooping up Bitcoin. And where retail investors might have a couple hundred
dollars to toss into Bitcoin or other cryptocurrencies, these institutional investors
are often managing millions, if not billions of dollars. And in addition to that,
these institutional buyers are typically longer term investors, they're not gonna buy
bitcoin and then sell it two or three days later because
they changed their mind, they're investing for a much
longer term time horizon. So not surprisingly, in 2020, we have seen some major
institutional buying of Bitcoin, as well as some major
acceptance of cryptocurrency from these big Wall Street billionaires. For example, we have
billionaire Paul Tudor Jones. He believes that investing
in Bitcoin right now is similar to investing in tech companies like Apple or Google way
back in the early days before they were a household name. And as far as this
billionaires portfolio goes, he says he has around one
to 2% of his total portfolio allocated into bitcoin. Not only that, but huge tech companies have stepped up to the plate as well, and some have even begun
purchasing Bitcoin themselves. Earlier this year, the payment
processing company Square, made the decision to purchase
$50 million worth of Bitcoin to hold on their balance
sheet instead of cash. Then we have a another
Wall Street billionaire named Stanley Druckenmiller. He came out and said that he does own Bitcoin in
his investment portfolio, but he didn't specify any amount. He also mentioned that he
is going to be shorting or betting against the US dollar. Lastly, we have hedge
fund manager Bill Miller. Recently he said, "I
think every major bank, every major investment bank,
every major high net worth firm is going to eventually have
some exposure to Bitcoin or what's like it." So many of the billionaires
that criticized Bitcoin in 2017, are either outspoken about
it in a positive way, or maybe even putting their
money where their mouth is, and putting some of their own portfolios into Bitcoin and other cryptocurrencies. And this could lead to a domino effect where it becomes common for
these institutional investors to allocate a certain
amount of their portfolios into cryptocurrencies like Bitcoin. Even if each institutional investor and hedge fund manager out there allocated just 1% of their
portfolios into bitcoin, that would be huge for
cryptocurrency and the price and the widespread adoption. So the next reason for the
2020 cryptocurrency rally and another reason why
it's different from 2017, is the way in which people
are purchasing Bitcoin and other cryptos. So back in 2017, you had to buy Bitcoin through a separate
cryptocurrency exchange. And this of course required
you to go out there and open up a completely separate account, you had to take photos of your ID verify your identity and jump through all of these different hoops to eventually be able to transact Bitcoin. Now, there are some
gigantic mainstream players that are allowing you to purchase Bitcoin and other cryptocurrencies
directly on their platforms. One of the biggest ones
on that list is PayPal which announced in October that they will be allowing their users to buy hold and sell Bitcoin
directly through PayPal. And then Square followed suit as well and allow people to do the same
thing through the cash app. The Commission free trading apps, Robinhood and Webull followed suit as well offering cryptocurrency trading right on that brokerage platform. Lastly on the list here we have Fidelity, one of the biggest brokerages out there that rolled out a cryptocurrency platform for institutional buyers. So now instead of having to open up a completely separate account in order to purchase your cryptocurrency, people are able to do
it through an account that they likely already have. And when there's fewer
hoops to jump through, and people are able to utilize names that they trust
and know, like PayPal, well, a lot more people
are willing to go out there and begin purchasing cryptocurrency. This is similar to the convenience of being able to buy
Nike products on Amazon, where you already have an account rather than opening up a
whole new account with Nike. So the next point I wanna cover here is something called the
Bitcoin block reward halving, which happened earlier this year in May. Now this does get a little
bit complicated here guys, but I'm gonna go ahead and give you a very simple explanation. So Bitcoin miners are
rewarded with Bitcoin in exchange for completing
complicated calculations. And essentially, these
calculations are used to validate Bitcoin transactions. However, just about every four years, the reward for completing
these transactions is reduced by 50% essentially controlling the new supply of Bitcoin available to the market. And as mentioned earlier, we just had our third
Bitcoin reward halving in May of this year. Prior to that, miners received 12.5 Bitcoin per block of calculations, and now that number has
been reduced to 6.25. And just about four years from now, that will be reduced by another 50%, and so on, and so on, just like that. And this is all to ensure that we have a controlled
supply of Bitcoin coming to the market, while also incentivizing people to run these Bitcoin miners that allow the whole
network to stay afloat. But the important thing to understand here is that 50% less Bitcoin is going to be mined every four years, resulting in a smaller and smaller supply coming to the market. And surprisingly, the
Bitcoin halving event itself doesn't often result
in an immediate rally, it usually comes a little bit after which was the case during
the last two halvings. But the crazy thing is, all
of the new Bitcoin being mined is being purchased
through just two platforms and those are Square and PayPal. According to Pantera Capital, PayPal users are now purchasing around 70% of all of the new Bitcoin
coming to the market through the Bitcoin mining and then square users
are buying about 40%. So between just these two platforms, all of the Bitcoin being
mined and then some is being purchased on these platforms, which explains why we're
seeing so much demand for this cryptocurrency and why that price is
climbing higher and higher. And lastly guys, my final reason why this time might be different
with the cryptocurrency rally, is what we have currently been seeing with the fiat currencies of the world. Now, if you're not
familiar, a fiat currency is simply a currency that
is backed by a government rather than a commodity like gold. In the past we were on the gold standard where dollars were backed by gold but now they're just backed by the overall faith and
strength of the US government and pretty much every
major nation out there operates with this fiat currency model. But since the money is not backed by any physical resource or commodity, you could potentially print or create an infinite supply of money, which is exactly what
we've seen happen in 2020 as a result of this global pandemic. When a government needs more money, they can simply just print
more of it out of thin air. Now, this, of course, is
a bit of a generalization and a government can't just print infinite money without consequences. We've seen that happen in the past, and it can massively devalue a currency. But nonetheless, this money printing has become a part of our everyday lives. We just have a fancy word for
it called quantitative easing. Well, in 2020, there has
been a lot of money printing here in the United States. In fact, estimates say that nearly 22% of all US dollars that
exist were created in 2020. And this of course, is the result of the multi
trillion dollar stimulus packages that were passed in response
to the global pandemic that shut down the world economy. And this of course has
spooked a lot of investors and pushed them away from the US dollar. Investors want something that you can't simply create more of. And just like there is a finite
supply of gold and silver and other precious metals on this earth, there's also a finite supply of Bitcoin. You can't simply print
more or make more of it. Only 21 million Bitcoins will ever exist with a controlled and dwindling supply. On the other hand, there's a
potentially infinite supply of these fiat currencies, where governments can just
turn on their money printers. So in 2020, gold prices have surged and so have Bitcoin prices, because a lot of people are
leaving these fiat currencies in exchange for something that
you can't just make more of. So those are my thoughts
on the 2020 Bitcoin rally and that is why I think this
time may in fact, be different. So that being said, what am I doing with my own
cryptocurrency portfolio? So in just a second, we're
gonna jump into my computer and I'm gonna show you guys what my portfolio looks like currently. Essentially, I've been buying
Bitcoin in small amounts, dollar cost averaging over
the last couple of years. I've also gotten a lot of free Bitcoin through the Coinbase referral program which is what I use to
purchase Bitcoin myself. Essentially, if somebody
purchases $100 worth of Bitcoin using my link down below, they get $10 of free Bitcoin
and I get $10 for free as well. So if you guys want to
use that link yourself, you're more than welcome to
it's going to be down below, if you wanna get 10 bucks
worth of free Bitcoin and support my channel in the process. So in total over the last couple of years, I have purchased 1.5 Bitcoin at a cost basis of $7,196 per coin. All of the rest of the Bitcoin that you're going to see in my portfolio, was completely free because it
came from Coinbase referrals. That being said guys, let's
jump into my portfolio now. Alright guys, so here we are inside of my cryptocurrency
portfolio and as you can see, it is currently worth just about $36,000. Now a lot of the gains in this account are over the last month or so, as you can see in the last
month I'm up about 50% or close to $12,000. Now as far as this overall portfolio goes, the majority of my money is
in Bitcoin 96.25% to be exact, which is around 1.8 Bitcoin total. Next, I have a little bit of Ethereum which was actually given to me. Somebody randomly sent me
Ethereum a couple of years ago and that was pretty cool. So I have one point for Ethereum, which is currently worth around $862. And then lastly, I do have a 5.4 Litecoin, I used to have a Litecoin
miner with my brother as kind of a side project, and we were mining it
for a couple of months and so we got some
Litecoin he sent it to me and so as a result I have
5.4 Litecoin as well. Now, I store my Bitcoin
offline in a hardware wallet using the Ledger Nano S
and this is ledger live, which allows you to track your
overall investment portfolio. This ensures that my
cryptocurrency is stored safely and I am the only one in control of it, that way there's no risk
of this getting hacked and me getting my cryptocurrency stolen. Now that being said, a lot
of people might be curious what my overall cost
basis is on my portfolio, so let me go ahead and show
you guys that spreadsheet now. So, I started dollar cost
averaging into bitcoin on December 16 of 2019, where essentially every single week I was buying just about
$500 worth of Bitcoin. After paying fees, this added up to 492.66 every single week. And in this sheet I logged how
much I was paying per Bitcoin and what I got in total each week. And then I did do a
larger lump sum investment back on March 12, when Bitcoin fell to just
around $6,000 per coin, I bought 0.56 for around $3500. And then my most recent
Bitcoin transaction was purchasing about
$1,000 worth on May 22. So besides that, I haven't put any additional
money into bitcoin, it's strictly been from
those Coinbase referrals. And those referrals are
accounted for up here, I have basically earned
0.3739 Bitcoin in total from those free Coinbase referrals. So in total across this
entire investment portfolio, my cost basis on
everything, is $10,838.52, which means if you count
my coin base referrals towards my total, my average cost basis across
my entire Bitcoin portfolio is about $6,000 per Bitcoin. So overall, since my entire
cryptocurrency portfolio is worth around $36,000, and since my cost basis is under 11,000, I have seen an overall return of 232.15% since I started this back in 2019, but I was earning those Coinbase referrals for many years prior. So anyways guys, there you have it. On the surface, it might
appear that we're repeating the same events of 2017, but I believe there's
good reason to believe that this time may in fact be different. If you guys enjoyed this video and you wanna see more Bitcoin or cryptocurrency related
content on this channel, make sure you hit a like on this video and drop me a comment down below. And if you're looking to buy
bitcoin as a complete beginner, I have a really helpful video tutorial that walks you through step by step exactly how to buy Bitcoin and
then store it safely offline on something called a hardware wallet which is exactly how I
store my cryptocurrency. So I'll have a link down
below for that video as well as that Coinbase link if you wanna go ahead and grab $10 worth of completely free Bitcoin. Thanks so much for watching guys, make sure you subscribe and
hit that bell for notifications and I hope to see you in the next video (light music)
