So yes folks despite its recent price bitcoin can be considered a value investment. More interestingly, its next big booster might be one Donald J. Trump.
President-Elect Trump stated the U.S. dollar is too strong, in a recent Wall Street Journal interview. It is not clear what Trump can do to dampen the dollar, because much of its strength comes from the weakness of other currencies particularly the Yuan.
Yet if he succeeds in weakening the dollar, Trump might boost demand and prices for bitcoin in three ways:
By encouraging Americans and others to move money into non-dollar investments. One of the main ones would be bitcoin.
By giving Americans and U.S. corporations an incentive to hedge money in non-dollar instruments such as bitcoin.
By lowering faith in the dollar which encourages alternative investments.
Expect to see a massive increase in interest in bitcoin, bitcoin mining and cryptocurrencies in the US if Trump succeeds. Also expect a big price increase for bitcoin and the other widely traded cryptocurrency; ethereum, if the dollar weakens.
Bitcoin has a Lot of Potential Value
This has also occurred in China where the weakening yuan has made the cryptocurrency a popular alternative investment. Most of the world’s trade in bitcoin takes place in the People’s Republic, a development that is frightening the People’s Bank of China to death.
The PBOC has even launched raids and inspections of bitcoin exchanges in a half-hearted attempt to dampen the trade. The central bank is so scared of bitcoin that it is researching the possibility of launching its own cryptocurrency.
Even greater bitcoin prices will be in store if Trump’s weak dollar policy leads to inflation in the US. Just a hint of inflation would send panicked investors rushing to hedge, which would be great for bitcoin.
So yes folks; bitcoin has a lot of potential value. It might not be a classic value investment, but this cryptocurrency certainly has a lot of potential.