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Investing $100 in Bitcoin in 2010 Would Have Led to $75 Million in Profit

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Bitcoin bull run

Earlier this week, Tai Lopez, the highly regarded investor and philanthropist, revealed that a $100 investment in bitcoin in 2010 would have led to a $75 million profit.

Within eight years, bitcoin has evolved into the most valuable and secure decentralized financial network in history, achieving a $72 billion market cap. No other decentralized technology has ever secured such a large market cap.

Factors Behind the Exponential Growth of Bitcoin

In general, the demand for bitcoin and cryptocurrencies is increasing at a rapid rate. Particularly, casual, professional, and institutional investors are beginning to adopt bitcoin as a safe haven asset, digital currency, and a store of value. Because it is decentralized, governments and authorities are limited in what they can restrict and regulate.

As prominent venture capitalist and NBA’s Golden State Warriors owner Chamath Palihapitiya stated:

“Absolutely not [bitcoin is not a fraud]. It cannot be a fraud. What countries can constrain today is how it [bitcoin] is effectively traded but it cannot be controlled. It is a fundamentally distributed system that exists peer to peer. And so to the extent that you can basically eliminate the will and the actions of every single person in the world, you can eliminate it. But in the absence of that, the genie is fundamentally out of the bottle.”

Outside the realm of early-stage investors in bitcoin such as Tim Draper and Palihapitiya, investors who were previously skeptical toward bitcoin and condemned the digital currency have started to acknowledge the growing demand for bitcoin and cryptocurrencies.

Most recently, Mark Cuban confirmed that he has purchased several bitcoins through a bitcoin exchange-traded note (ETN) in the Swedish stock market. XBT Provider, one of the few bitcoin ETN providers, has been operating in the Swedish Nordic Nasdaq, providing liquidity to professional traders and institutional investors.

“It is interesting because there are a lot of assets which their value is just based on supply and demand. Most stocks, there is no intrinsic value because you have no true ownership rights and no voting rights. You just have the ability to buy and sell those stocks. Bitcoin is the same thing. Its value is based on supply demand. I have bought some through an ETN based on a Swedish exchange,” said Cuban at the Vanity Fair New Establishment Summit in Los Angeles.

Many analysts, traders, investors, developers, and entrepreneurs remain certain that as bitcoin continues to evolve as the leading decentralized financial network, its market cap would surpass the $1 trillion mark and challenge existing financial systems such as fiat money, reserve currencies, and assets such as gold.

Earlier this year, Dennis Porto, a bitcoin investor and Harvard academic, told Business Insider that the bitcoin price can very likely reach $100,000 if it follows the Moore’s law.

“Moore’s law specifically applied to the number of transistors on a circuit but can be applied to any digital technology … Any technology that is growing exponentially (i.e., ‘following Moore’s law’) has a doubling time,” noted Porto.

Based on bitcoin’s maximum supply of 21 million, the price of $100,000 per bitcoin would lead to a $2.1 trillion market cap for bitcoin.

Trading volumes are rising but volatility is decreasing. Positive indicator of long-term growth.

Kay Van-Petersen, a senior analyst at Saxo Bank, who accurately predicted the bitcoin price surge in early 2017 when the bitcoin price surpassed $2,000, also stated that there is a strong case for bitcoin reaching a value of $100,000.

“Volumes are going up, volatility is going down. A lot of people talk about the volatility, but if you are in Zimbabwe or Venezuela, this volatility is nothing. This is the interesting thing to me. I think in the West, a lot of people view it is as speculative, but emerging markets will get it, their needs will be different,” Van-Petersen explained.

Acknowledging that bitcoin is still at its early stage in development, adoption, and scalability, newly emerging investors in the cryptocurrency market are not late in investing in bitcoin and understanding the technology behind the cryptocurrency.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.4 stars on average, based on 3 rated postsJoseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.




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  1. El Euther

    October 6, 2017 at 7:32 pm

    2010. Not 2014. Headline and first sentence are pretty wrong.

    • Joseph Young

      October 8, 2017 at 7:35 am

      Where does it say 2014? “2014” doesn’t appear once in the article. Please read properly before saying the article is wrong. I haven’t said 2014 once.

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Analysis

Italy Spooks markets Again as Stocks Remain Under Pressure

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European stocks Led the way lower today despite a bullish start in Asia, as equities gave back their gains when Daimler published a surprising profit warning, which was deeply affected by the recent trade war developments, reigniting fears of a tariff-driven downturn in global trade.

DAX, 4-Hour Chart Analysis

The Old Continent got into more trouble later on, when two anti-EU officials were named in Italy, resurrecting fears of a clash between the systematically crucial country and the core of the Eurozone. Italian yields rose in European trading, and although they are still shy of the levels hit during the May scare, the periphery could be in trouble as the ECB pledged to exit the market by the end of the year.

Nasdaq 100 Futures, 4-Hour Chart Analysis

The main European indices were smashed lower during the session, with the DAX hitting a two month low, still being very weak relatively speaking compared to its US peers. US stocks sold off heavily following the opening bell and they failed to recover, unlike two days ago, and the major benchmarks traded well below yesterday’s levels just before the close.

The Nasdaq and the Russell 2000 lost some of their recent mojo, pulling back heavily of the all-time highs during the day. All in all, the risk off shift continues to dominate across the board, as we expected and we remain negative on risk assets here, especially regarding emerging markets, even as the Dollar’s rally could be over for a while.

Dollar Pulls back as Pound Surges

USD/CAD, 4-Hour Chart Analysis

The Dollar took a beating as the Philly Fed Index came in much worse than expected, and as the Bank of England sent hawkish signals, pushing the Pound and the Euro higher. The central bank left its benchmark rate unchanged at 0.5%, but a rate hike this year got much closer, with a key member of the bank voicing inflationary concerns.

The Greenback fell more than what the events would imply, so a larger scale consolidation could have already started in the currency following the recent gains and the marginal new high yesterday. With the EUR/USD pair nearing the 1.1450-1.15 support zone, the USD/CAD hitting 1.33 and the AUD/USD touching 0.7350, a meaningful counter-trend move would be timely in the surging reserve currency.

WTI Crude Oil, 4-Hour Chart Analysis

Gold continued to drift lower before the Dollar’s reversal and it hit $1262 for the first time since lat December before bouncing back above the $1270 level in late trading. Crude oil also fell sharply in early trading, and the WTI contract traded with a $64 handle before rallying back to $66 per barrel.

The OPEC meeting, which is expected to result in a supply increase by the cartel made the crucial commodity very volatile in recent days, but we expect the bearish trend to continue, with a likely dip to the $60 level in the coming weeks.

Featured image from Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 279 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Analysis

Crypto Update: Coins Drift Sideways as Trading Activity Plunges

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Liquidity dried up in the cryptocurrency segment in recent days, as trading volumes have been declining progressively, while the major coins got stuck in tight ranges. Only a few coins show signs of activity, and the bearish short-term patterns continue to dominate the market. With a group of currencies, namely Litecoin, Monero, Dash, and Bitcoin itself clearly dragging the segment down, the short-term trend will likely continue, as the previous leaders are now showing strength either.

While all of the top digital currencies are showing some gains today, and the total value of the market edged close to $290 billion, major resistance levels are still towering above. The fact that the effect of the Bithumb hack faded away quickly is a positive here, but until signs of bullish momentum and a clear leadership forming, the short-term outlook remains bearish.

BTC/USD, 4-Hour Chart Analysis

Bitcoin continues to trade near the $6750 level, edging ever closer to the declining short-term trendline, in a bearish consolidation pattern. Bulls would need a sustained move above $7000 to negate the declining trend, but for now at least a test of last week’s lows is likely with a possible move towards the key long-term zone between $5850 and $6000.  The short-term zone around $6350 level provides support, while further resistance is ahead near $7350.

Ethereum Nears Trendline as ETC Attempts Breakout

ETH/USD, 4-Hour Chart Analysis

Ethereum has been among the strongest coins in the last few days again, and coupled with its long-term relative strength, the second largest coin is still the best candidate to lead a recovery. That said, the coin still faces strong resistance between $555 and $575, and bullish momentum is suspiciously weak. Primary support is found at $500 with further zones near $450 and $400.

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic has been positively diverging compared to the rest of the market, together with Binance Coin, and to a lesser extent Tron ever since its inclusion to Coinbase, and the coin moved above the key $16 resistance yesterday in late trading.

While ETC is slightly overbought from a short-term perspective, a consolidation above $16 and a subsequent move higher could confirm a trend change. For now, the short-term trend signal is only neutral, and traders should remain cautious given the broad downtrend in the segment

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Altcoins

Treading the Floods: Cryptocurrency Prices Stable Following Bithumb Attack 

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Cryptocurrencies emerged unscathed Wednesday following yet another security breach of a South Korean exchange, as the market continued to favor a corrective rally for bitcoin and the major altcoins.

Crypto Prices Hold Steady

Bitcoin fell by as much as $200 Wednesday on news of a cyber attack targeting South Korea’s Bithumb exchange. However, the coin quickly recovered and now sits just shy of $6,800, according to data provider CoinMarketCap. Prices peaked at $6,821.56 at 12:34 UTC.

Compared with 24 hours ago, bitcoin’s per-coin value was virtually unchanged.

The ten biggest altcoins by market cap exhibited the same pattern, with prices treading water compared with Tuesday afternoon. The total cryptocurrency market was valued above $290 billion, up from an earlier low of around $282 billion.

Bitcoin and the major altcoins have more or less retained their bullish bias, which suggests that a continuation of the upward trend is likely. Since bottoming last week, coins have rebounded $26 billion.

Bithumb Attack: What We Know

Hackers made off with roughly $31 million in stolen cryptocurrency on Wednesday as Bithumb suffered its third cyber breach in 12 months. The attackers reportedly targeted users’ holdings of XRP, the third-largest cryptocurrency by market cap, by running a series of unauthorized access attempts.

Bithumb was unable to prevent the attack despite spending upwards of 10 billion won ($9 million) on security enhancements. This includes complying with new guidelines for financial institutions requiring 5% of company staff be made up of IT specialists. Bithumb has reportedly exceeded that quota by a wide margin.

The Seoul-based exchange confirmed that it had migrated outstanding crypto balances to cold storage and said it will fully refund affected users. Transactions on the exchange remain suspended for now.

Although news of the attack hit the airwaves on Wednesday, some analysts believe the theft occurred several days earlier as part of Bithumb’s data upgrade. However, the exact cause of the breach remains unclear.

Goldman Sachs Weighs Crypto Trading as an Option

U.S. multinational investment bank Goldman Sachs is considering taking a bigger dive into cryptocurrency by launching a full-scale trading operation, according to COO David Solomon.

“We are clearing some futures around bitcoin, talking about doing some other activities there, but it’s going very cautiously,” Solomon said during an interview in China, as reported by CCN. “We’re listening to our clients and trying to help our clients as they’re exploring those things too.”

Currently, the Wall Street investment giant is clearing bitcoin futures contracts. It has also announced plans to introduce a new bitcoin trading operation, which includes using its own money to trade with clients in a variety of contracts linked to bitcoin.

Institutional traders are awaiting the arrival of custodial services dedicated to cryptocurrency before taking the full plunge into digital assets. To that effect, the San Francisco-based  Coinbase exchange is leading the charge by announcing a new line of crypto custodial services to unlock up to $10 billion in institutional capital.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 462 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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