We are reaching a watershed moment in the history of cryptocurrency. The price of Bitcoin is close to reaching $2000. I remember starting to read about Bitcoin in 2011 and watching the price go from $1 to $31 to back to $2 by the end of the year. At no point, did I ever think that Bitcoin was going to reach $100, let alone $2000!
I am now a firm believer not only in Bitcoin but in the cryptocurrency market as a whole. Bitcoin as not only established itself as the premier cryptocurrency but as a flight to quality for the market. We will continue to see a net inflow into Bitcoin as more retail and institutional investors begin to see Bitcoin as a vital part of an investment portfolio. I think it's fair to say that in 5 years institutions will dedicate at least 1-2% of their portfolio to Bitcoin.
From a macroeconomic perspective, Bitcoin will be used in countries such as Venezuela where the Venezuelan Bolívar's 2016 inflation rate was over 800%. Many of us that live in developed countries can't imagine bringing a bag of cash to a store just to buy bread, but this is a reality in countries with rampant inflation and corrupt government. Bitcoin is a more stable currency than many fiat currencies, resistant to government tampering and recession proof. In the United States, we are blessed with what is undoubtedly the strongest fiat currency in the world. Part of my cryptocurrency thesis is that investing in cryptocurrency is a bet against fiat currency in emerging markets.
We will also continue to see governments with more stable currencies accept Bitcoin as a legitimate form of payment. Japan has recently passed a law that makes Bitcoin a legal currency. Russia has reversed its stance on Bitcoin and is looking to pass a law that makes Bitcoin a legal financial instrument. Bitcoin is the killer app for payments in the cryptocurrency industry. It's relatively cheap, quick, and easy to use. I only see Bitcoin continuing to grow. Maybe we will be saying $10,000 in 2018?