“Over the last decade I’ve had this conversation dozens of times with people around dinner tables, in boardrooms, over coffee, and with friends who quietly admit they’ve been putting off learning about Bitcoin because it feels too confusing, too risky and too late…
The Sceptical Investor.
Healthy scepticism has protected investors from bad decisions for generations. It stops us chasing fads, fomo or falling for hype and confusing speculation with genuine opportunity.
In fact, I’d be more concerned if you weren’t sceptical.
I’ve spoken to hundreds of people from all walks of life ranging from professionals, business owners and retirees from around the world. Most arrive with exactly the same questions.
- “Hasn’t Bitcoin already gone up too much?”
- “It doesn’t produce income, so where does its value come from?”
- “What if governments ban it?”
- “Wouldn’t I be better off buying more shares or property?”
- “What if it goes to zero?”
They’re sensible questions. Actually from a recent client…
This article isn’t designed to convince you to buy Bitcoin. It’s designed to help you ask better questions.
Because once you understand what Bitcoin actually is and just as importantly, what it isn’t you’ll be in a far better position to decide whether it deserves a place in your financial portfolio.
The biggest mistake people make
Most people compare Bitcoin with the wrong things. They compare it to shares, property, gold or a speculative technology stock.
In reality, Bitcoin doesn’t fit neatly into any of those categories. That’s why intelligent people often reach completely different conclusions. One person sees it as digital gold, another sees it as internet money, another dismisses it as a speculative bubble. They’re often describing different aspects of the same thing.
Before asking whether Bitcoin is a good investment, it’s worth asking a simpler question.
What problem was Bitcoin created to solve?
Without realising the fact that like evolution creates change that most people take for granted so too does money…For most of human history, money evolved because societies needed a better way to exchange value.
Shells became metal.Metal became gold.Gold became paper certificates.Paper eventually became numbers on computer screens.
Each step made money easier to use. But something else changed along the way. Money became easier to create. Today, most of the money in circulation isn’t printed as notes and coins. It’s created digitally through the banking system. That isn’t a conspiracy. It’s simply how the modern monetary system works. The consequence is that the purchasing power of money tends to decline over time through inflation. The weekly grocery bill is higher than it used to be.
- Houses cost more.
- Education costs more.
- Healthcare costs more.
- Groceries cost more.
In other words, the money itself quietly buys less. The extreme being those unfortunate enough to live through hyper inflation such as those living in Argentina, Turkey, Venezeula and Zimbabwe.
Bitcoin approached the problem from a completely different angle. Instead of trusting people to limit the supply, it built the limit into the system itself.
- No government.
- No company.
- No central bank.
Just transparent rules that anyone can verify through the blockchain.Whether that ultimately proves to be valuable is for history to decide. But it is undeniably different right now!!
But it doesn’t produce income
This is probably the objection I hear most often. It’s also one of the most understandable. We’re taught that good investments produce income. Shares pay dividends. Property earns rent. Businesses generate profits.
- Bitcoin does none of those things.
- Neither does gold.
- Neither does cash sitting in your wallet.
- Neither does the emergency fund in your bank account.
- Not every asset exists to generate income.
- Some exist simply to preserve purchasing power.
The important question isn’t: “What income does Bitcoin produce?” It’s: “What role could it play within an overall financial plan?”
Sometimes we’re asking the wrong question because we’ve put Bitcoin into the wrong category.
But, hasn’t it already gone up too much?
Perhaps or perhaps you’re asking that question at the wrong point in the journey. People have asked whether Bitcoin had gone up too much at $100, $1000, $10,000.00, $60,000.00 $100,000.00 etc
Sometimes they were right for a while. Sometimes they weren’t. Nobody knows where Bitcoin will trade next year. Anyone claiming certainty should be treated with caution.
The better question is this:
If Bitcoin continues to mature over the next decade, would owning none at all be a risk?
That’s a very different conversation.
Volatility isn’t the same as risk.
Bitcoin is volatile and nobody should pretend otherwise. Its price can rise or fall dramatically over short periods. But volatility and risk are not identical. Risk is the possibility of permanently losing capital. Volatility is often simply the price moving around.
For long term investors, understanding that difference matters.
Bitcoin may or may not earn a place in your portfolio. But dismissing it solely because its price moves quickly can prevent a more thoughtful discussion.
You don’t have to believe everything.
One of the biggest misconceptions is that understanding Bitcoin requires joining some kind of cult. It doesn’t. You don’t need to believe Bitcoin will replace every currency. You don’t need to think governments will disappear. You don’t need to become a technology expert. You simply need enough understanding to make your own decision.
That’s all.
Why I coach Bitcoin
Firstly I lived in Zimbabwe and saw first hand what hyper inflation is like, how you enter a supermarket and the price of milk is $10 then by the time you’re at the till the price is $100. Their currency went from $10-$100-$1000 to a One Hundred Trillion note.
The extreme loss of purchasing power may not happened to your country any time soon, but day to day inflation is real and everyone is in the midst of it.
Over the years I have been approached and helped many people understand the difference between Bitcoin and the other crytpocurrencies having lived through the ups and downs myself. The most common question is should I buy this coin or that coin and the answer is simple.
Most people don’t need another opinion they just need clarity.
There is an overwhelming amount of information online some of it excellent and a lot of it dangerously wrong and hyped up by those with vested interests. My role isnt to persuade you, its to help you separate signal from the noise!
A final thought
Whether you eventually buy Bitcoin isn’t actually the point. The point is understanding the world you’re investing in. Bitcoin is now large enough, established enough and influential enough that ignoring it completely is no longer the obvious choice it once was.
Perhaps, after reading this, you’ll conclude it isn’t for you and that’s perfectly ok Or perhaps you’ll decide it’s worth learning a little more and If that’s the case, then this article has achieved exactly what it set out to do.
Because good investing doesn’t begin with certainty. It begins with curiosity.