Cryptocurrencies have come a long way, but 10,000? That just seemed like a pipe dream, even up to a couple months ago. And when bitcoin prices inched ever closer to five-digit territory, it did so agonizingly slow. Yet bitcoin 10,000 has finally arrived!
According to The New York Times, South Korean crypto exchanges took the honor of first hitting bitcoin 10,000 on Monday. Several hours later, multiple American-based exchanges, including Coinbase, came close to reaching the benchmark.
Sky News reported on Tuesday, at approximately 4am EST, the British exchange CEX secured the near-mythical five-digit target. Stateside, we cleared the milestone at around 6:15am EST.
Bitcoin prices have always generated fierce debate. Even the most outspoken critics — I’m talking to you, Jamie Dimon — must now admit that they did a great disservice to their audience. At 10,000, bearish analysts denied investors nearly 900% of profits in less than one year! Even in September, when Dimon compared cryptocurrencies to tulip bulbs, investors could have gained more than 100% profits.
I first wrote about cryptocurrencies on InvestorPlace back in January of this year. If I may say, it was a massive struggle, involving pestering my senior editor to the point of outright begging. But I strongly believed in the potential for bitcoin prices, and I’m glad I stuck to my guns. Whoever paid attention had a great year.
The beauty of cryptocurrencies is that free from traditional market constraints, these puppies can fly hard and fast. When I made my call for bitcoin 10,000 at the beginning of September, late-to-the-party investors still had ample time to make substantial profits.
Of course, the question now is, where to next?
Bitcoin 10,000 Inciting Unfair Criticisms
Before I address this natural inquiry, I want to talk about an associated topic: Is the bitcoin bubble hype or reality?
To no one’s surprise, I don’t believe we have hit bubble territory yet. One reason I remain optimistic on bitcoin prices is that in the efforts bearish analysts take to call crypto traders insane, they have ended up losing the plot as well. Let’s face it: most people are criticizing cryptocurrencies because of their price point, not their value.
I take issue with this line of reasoning because financial analysts rightfully warn that penny stocks are not necessarily cheap, and companies like Apple Inc. (NASDAQ:AAPL) or Amazon.com, Inc. (NASDAQ:AMZN) are not necessarily expensive. It’s the overall context that matters.
I’m almost certain that if bitcoin prices were trading in the hundreds, yet its market capitalization was in the trillions, no one would bat an eyelash. But a major reason for bitcoin 10,000 is its extremely limited supply. If Apple or Amazon only had less than 17 million shares outstanding, their prices would be through the roof.
Another bitcoin bubble argument I find annoying is that the digital token has no fundamental value. Really? The underlying blockchain technology has the potential to upend the financial system. Furthermore, the bitcoin platform is superior to the current way we invest.
Wall Street is a discriminatory network. For many folks, it’s a complicated and corrupt place to grow your money. Trading occurs under arbitrary rules and schedules. Certain qualifications are needed to trade more obscure financial vehicles. For goodness sake, they have a plunge-protection team!
Cryptocurrencies are open source. Anyone can gain access to 24/7, borderless trading. Yes, nefarious characters take advantage of it, but that’s not exclusive to bitcoin. Ever heard of Enron?
I find it amusing that many of the same analysts who love the Internet of Things besmirch cryptocurrencies. So digitalization is supposed to improve every aspect of my life, but not my investments? I’m sorry but that makes no sense.
With growing recognition and integration, bitcoin has a truly legitimate chance of becoming the “currency of the internet.” Thus, bitcoin 10,000 is only the beginning, not the end. I genuinely would not be surprised if the virtual currency hit $100,000 a pop. The only grey area is the timing.
Consider that on a daily basis, more than $5 trillion of fiat currencies are traded. The vast majority, of course, are U.S. dollar-pairings. Moreover, fiat currency trading is an elitist activity, for lack of a better word.
In contrast, bitcoin is an “everyman” investment. Some choose to mine it. Some choose to buy it. And yes, some buy drugs with it. Essentially, cryptocurrencies represent the fiscal side of our collective consciousness.
Yet with all that coverage, Bitcoin’s total value is less than $167 billion. That’s a drop in the bucket compared to the increasingly anachronistic fiat monetary system. Is Bitcoin 10,000 a bubble? I wouldn’t bet on it.
As of this writing, Josh Enomoto was long bitcoin.