Dominic Frisby
Next year is going to be a good one for bitcoin. You absolutely must own some. In January, the likelihood is that America’s Securities and Exchange Commission ( SEC), the key financial regulator, will approve bitcoin exchange-traded funds (ETFs). Then in February the ETFs will begin trading and, with the SEC’s legitimisation of the asset, billions of dollars of capital will be invested in them, much as happened with gold and silver ETFs. Come the spring we will see the next halving event. This is a process whereby the reward bitcoin miners receive for validating transactions falls by 50%, slowing the rate at which new bitcoins enter the market and reducing new mining supply. Every bitcoin bull market has occurred around the time of a halving event.
Then we get interest-rate cuts and easy money in the run-up to the US election. Towards the end of the year, we see perhaps the biggest catalyst of the lot. Bitcoin has, hitherto, largely been driven by retail investors. When large corporations start holding their Treasuries in bitcoin to avoid 10% annual currency debasement, the game changes. A few, such as Nasdaq-listed MicroStrategy (Nasdaq: MSTR) have already blazed this trail. But in December, the Financial Accounting Standards Board (FASB), the US entity that details how companies should report assets on their balance sheets, will begin to allow this, and many more will follow.
Lots of catalysts, then. But the main reason to own bitcoin is that this is a technologically superior form of money to fiat currency. Its scalability, from micropayments amounting to 1/35th owning it.
