As Bitcoin nearly reached the $25,000-mark over the festive season, I sold half of my holdings in the digital currency.
Reaching yet another all-time high on Christmas Day, I decided to sell half of my Bitcoin holdings as I believe it should now be treated as any other investment – sell high and re-buy in the dips.
The cryptocurrency’s steady price gains throughout 2020 have made Bitcoin the top performing asset of this year, up over 200%.
As such, I considered it the right time for profit taking.
Nevertheless, I want to make it absolutely clear. There should be no misunderstanding about my decision to sell half my Bitcoin. It’s certainly not down to a lack of belief in the cryptocurrency. It’s about profit-taking now to buy more in the future.
Indeed, now more than ever, I believe that cryptocurrencies are the future of money.
Before Christmas, Bitcoin skyrocketed past $20,000 for the first time, with some of the world’s biggest institutions – including multinational payment companies and Wall Street giants – piling into cryptocurrencies, bringing their immense expertise and capital with them. This, of course, bolsters consumer interest.
Moreover, as governments keep supporting economies and increase spending due to the Covid pandemic, investors will look to Bitcoin more and more as a hedge against inflation.
Indeed, the intrinsic traits of digital currencies are making them ever more appealing.
These are that they’re borderless, making them perfectly suited to a globalised world of commerce, trade, and people; they’re digital, making them an ideal match to the increasing digitalization of our world; and demographics favour cryptocurrencies as younger people are more likely to embrace them than older generations.
In addition, a poll carried out by deVere earlier this year showed that nearly three quarters of high-net-worth individuals will be invested in digital currencies before the end of 2022.
Like me, many traders will view the record high prices as an opportunity to sell, so in the near-term we will likely see some pullback.
That said, I believe Bitcoin’s longer-term price trajectory is unquestionably upwards.
Nigel Green is CEO and founder of deVere Group, one of the world’s largest independent financial advisory and fintech organisations.