Learn from one of the greatest investors, Buffett, how to invest in Bitcoin!
Warren Buffett is one of the greatest investors of all time, and his continued success in traditional financial markets for more than half a century has enabled him to raise a lot of money. Today, Warren Buffett has more than $ 85 billion in personal wealth.
When I researched his main investment principles, I realized that Warren Buffett actually has a Bitcoin mindset. This may seem surprising at first glance, but once you read this story, I am sure you will agree with me.
1.Warren Buffett hates Bitcoin
As we all know, Warren Buffett is a supporter of the value-oriented investment philosophy. He is an absolute proponent of Benjamin Graham's work, and Benjamin Graham is one of the founders of this philosophy. The "Omaha Prophet" is also known for never investing in areas he doesn't understand.
Just like Warren Buffett's philosophy, during the emergence of GAFA in the late 1990s, he missed many promising investment opportunities in the technology field.
His official position on bitcoin fits his philosophy exactly, as Warren Buffett puts it: "Bitcoin may be the square of rat pills."
However, if you look at his 4 basic investment rules and convert them to Bitcoin, you will find that Warren Buffett's mentality of treating money is actually similar to Bitcoin's "Bitcoiners with Bitcoin".
★ Rule 1: Bitcoin is King
Warren Buffett often reiterates that money is the king of financial markets. Therefore, you need to have sufficient liquidity to take advantage of all opportunities.
Bitcoiners also believe that Bitcoin is king.
Bitcoiners believes that other cryptocurrencies are pale copies of the future, and Bitcoin is the only cryptocurrency that can be purchased and accumulated. This radical stance is called Bitcoin extremism.
Bitcoin holds almost 70% of the market dominance in the cryptocurrency industry. This can be explained by the fact that the public often associates the cryptocurrency world with Bitcoin.
New entrants always buy bitcoin first, which makes the bitcoin market much more liquid than other cryptocurrencies.
Bitcoin's dominance has been strengthened, because to purchase most “altcoins”, you must first buy bitcoins in a fiat currency before you can exchange bitcoins into your chosen “altcoins”. Finally, in a fairer future where Bitcoin is built block by block, having bitcoin is as important as having cash.
★ Rule 2: Be afraid when others are greedy
When people ask him for the secret to investing in the stock market, Warren Buffett often tells them the following: "Fear when others are greedy, and greedy when others are afraid."
This is the philosophy of Bitcoiners, and when the bitcoin market is out of control like at the end of 2017, they really have doubts. On the other hand, in a long bear market like 2018, Bitcoiners seized the opportunity to accumulate more and more bitcoins when many people who were not interested in or believed in bitcoin surrendered.
As a result, Warren Buffett and Bitcoiners behave similarly in terms of the ideal time to invest.
★ Rule 3: Buy Bitcoin forever because it is undervalued
Warren Buffett's value-oriented investment philosophy is to always buy the stocks of undervalued companies. According to him, in order to make a successful investment, your job is to find undervalued stocks.
This philosophy is still consistent with those who are accumulating more and more bitcoin because they believe that the current price of bitcoin is greatly underestimated. The creators of Bitcoin believe that Bitcoin is a revolution that will become a reliable alternative to the current currency and financial system in the future.
This situation will lead to the widespread use of Bitcoin, which will bring more and more utility. As demand grows, the price of Bitcoin will rise to unprecedented levels.
Some predict that the price of Bitcoin will reach at least $ 100,000 by 2025, while others predict that the price of Bitcoin will rise to $ 1 million by 2030 before finally stabilizing.
Because Bitcoin traders believe that the price of Bitcoin will reach such a level, they take it for granted that the current price of Bitcoin is undervalued, which means that they will continue to buy Bitcoin.
★ Rule 4: Buy and hold Bitcoin
If you want to make a successful and profitable investment, Warren Buffett advises you to make a long-term investment. Once you have selected a stock, you should buy it and hold it for as long as possible to maximize your profit.
Bitcoin buyers and Warren Buffett's stock investment share exactly the same philosophy: buy and hold as long as possible.
This explains why Bitcoiners will not tremble when the price of Bitcoin drops from $ 20,000 at the end of 2017 to $ 3,000 in 2018. Their unshakable confidence in Bitcoin gives them resilience and continues to accumulate Bitcoin.
Since 2010, the minimum annual price of Bitcoin has continued to rise, which clearly proves that they are right, because they retain their own Bitcoin, and if they are patients and believers, they must be the winner of Bitcoin.
It's common sense that Warren Buffett is a strong opponent of Bitcoin. The reason is simple: Bitcoin is a technological revolution that Warren Buffett does not understand. He developed a habit of never investing in areas he didn't understand.
Therefore, in accordance with his investment philosophy, Warren Buffett missed the emergence of GAFA in the late 1990s. When the investment philosophy of Bitcoiners, the firmest defender of Bitcoin, was exactly the same as his philosophy, Warren Buffett also missed the Bitcoin revolution.
Although Warren Buffett doesn't know about Bitcoin, he still has the mentality of Bitcoin. Given his wealth and age, Warren Buffett can miss the Bitcoin revolution.
Tips: invest with caution
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