Is Bitcoin a Necessary Asset Class? Bitnote Creator Says Yes
Adam Kornfield thinks everyone should own Bitcoin.
Kornfield is the co-creator of Bitnote, a freely available Bit-currency price quoting system that converts prices listed as 0.0027760 BTC to a more consumer-friendly form, in this case 2.84 Bitnotes.
In an opinion piece posted on Medium, Kornfield made a case on why Bitcoin is a necessary asset class, even just 5% of one’s portfolio. He argues:
There are speculations that Bitcoin could someday rival a currency like the dollar or euro. If the value of all dollars is more than 1,000 times the value of each Bitcoin, there is plenty of room for Bitcoin to increase in value—and thus provide a significant return on investment.
Upside — Bitcoin rivals a major world currency and is worth 1,000x the current value.
Downside — Bitcoin goes to zero.
Reasonable scenario — With a current price of around $650 per coin, and a total currency value of $8b, the value of Bitcoin could easily increase by 10x and still be extremely small compared to the value of the dollar or euro. You want to be an owner if this happens.
Kornfield suggests that buying into Bitcoin today is akin to the hypothetical opportunity to buy into the Internet in 1996. In hindsight, that would have been a great idea, right?
Well, of course, everyone should make their own investment decisions. Do you agree with Adam Kornfield?
It’s March of 2014. I thought this was evident by now. Take a small percent of your portfolio, that you’d normally allocate to extreme-high risk investments, and buy some bitcoin. It’s a risky gamble; it’s possible you’ll lose it all, but its upside is massive. It’s a risky investment, but not a stupid one. That’s why you divide your portfolio into varying risk classes regardless. And bitcoin is a great investment for the highest risk class of your holdings.