Investing in Bitcoin
An introduction to Bitcoin
The following paper provides an introduction and overview of bitcoin. All investors should read the disclosure material before investing. You should also seek advice from an independent financial adviser to help you make investment decisions.
Naturally, there are others who are less positive (or not positive at all) about the future of bitcoin. The key change we have noticed, however, is that the number of bitcoin supporters has increased rapidly.
Bitcoin has great potential but also carries significant risks
Investors should make informed choices as to whether investing in bitcoin, or the Bitcoin ETF PIE Fund, is right for them. This is a highly speculative investment. Bitcoin is a highly volatile asset.
This means the Bitcoin ETF PIE Fund will not be appropriate for all investors. You should read the disclosure material before investing. You should also seek advice from an independent financial adviser to help you make investment decisions.
Is bitcoin digital gold 2.0?
Because gold has a scarcity of supply that is not easily manipulated, its price is largely driven by demand. This is a key characteristic causing gold to traditionally be seen as a store of value and a popular hedge against inflation.
Gold has long been seen as a safe haven asset during crises and has increased considerably in value, particularly in times of high inflation or credit creation. Like every asset, the price of gold goes up, and goes down. Gold also has its limitations as a store of value.
Like gold, bitcoin is a scarce asset
Only 21 million bitcoin will ever be created, with over 90% of that total already circulating in the market. The remainder of the available bitcoin will be mined via decentralised computing power in steadily decreasing amounts until 2140.
Unlike gold, in an increasingly digitised world bitcoin is easily transferable, and so far has proven irreplicable.
Bitcoin’s demand and consequently its price have been steadily increasing since its inception in 2008 (though it has to be said certainly not in a straight line!). The current macro and political backdrop have seen unprecedented central bank currency printing and issuance of government bonds to fund large government deficits.
This global increase in monetary supply is increasing inflationary pressure on assets around the world, and on consumer goods in many third world nations. The finite quality of bitcoin, which is verifiably scarce, makes it a strong candidate as a hedge against future inflation and currency devaluation.
Maturing market confidence
Until recently bitcoin has been the domain of techies and early adopter retail investors, but this is rapidly changing. As the market matures with mainstream adoption, hedge funds, investment banks and listed corporates have entered the bitcoin market, along with some of the largest and smartest investors in the world.
Rather than investors having to send funds to an overseas exchange and understand the intricacies of hardware wallet storage to safely invest in bitcoin, well-functioning and regulated platforms such as Raise Investments Limited make bitcoin accessible to a wider range of investors. Raise Investments Limited provides a simple, smart and trusted way to invest in bitcoin through a PIE fund, which is managed and regulated in New Zealand.
