I wrote an article a while back in which I outlined some of the more common reasons traditional finance workers and investors seemed hesitant to embrace the blockchain and Bitcoin. While these folks admitted that the blockchain itself and the technology behind Bitcoin were impressive and disruptive, they seemed unimpressed with the tokens themselves. Wouldn’t you know, one of the individuals I mentioned who happens to be a close friend of mine has finally purchased some Bitcoin for himself. He joins the ranks of many new investors who have had their interest piqued by Bitcoin’s recent price gains.
Bitcoin’s Latest Bull Run was too Tempting
While my investor friend and I were having drinks the other night, he asked me how Bitcoin had been performing recently. Usually he is subjected to almost constant texting from me regarding its current price, but I had been busier than usual with some projects and was unable to send my usual updates. During drinks, Bitcoin was trading at around US$3800 (and at the time of writing is sitting at US$4359). My friend was completely floored when I told him this. The last time I had texted him, Bitcoin was at about US$2700. He immediately fell silent and frantically started tapping away at his phone.
“It’s performed that well this year?” he asked, barely able to believe what he was seeing. “Fine, I’m finally buying some of my own.” Right then and there my friend made a Coinbase account and purchased Bitcoin on the spot. Bitcoin’s incredible performance had convinced a person who had not seemed into the idea of owning cryptocurrency, and he is just one of the many recent new investors in the coin.
Bitcoin is becoming mainstream as an investment and form of payment more quickly than even I had anticipated, and I am confident that is due to its present value. But even with the excitement of new investors like my friend, newbies have also been hitting some frustrating barriers to entry.
Barriers to Entry are Joykills
While purchasing his Bitcoin, my friend expressed his frustration over Coinbase’s fees, speed, and limits on traders without verified accounts. These problems are not unique to Coinbase. “With traditional trading I pay a flat fee per trade; this percentage fee can really add up quick,” he noted. “And what is up with only being able to trade $2,500 right now? What if I want to buy more?” Though he was frustrated with these aspects of entering cryptocurrencies, he acknowledged that setting up brokerage accounts could also be a pain.
While these barriers are annoying for new traders, holders, and investors, my friend also pointed out that he thought cryptocurrency might be a good way to hedge his positions in the traditional market, particularly in the case of an economic bubble. Indeed, investors do often look to alternative investments in times of market turmoil. He said he would do his research — something all investors should do — before trying it out further. His final thought on Bitcoin that night was that although he wanted more, he was sad he hadn’t invested earlier when it was cheaper. I told him about Bitcoin Pizza Day and how much those coins would be worth now. We both sighed heavily and then decided to order a pizza of our own, with fiat and not his shiny new Bitcoin.