Building Bitcoin Wealth: When “The Herd” Behave as Expected


Believe it or not, Bitcoin is now over ten years old. That’s an entire decade! And yet, ask the average person what it is, and you will most likely get an answer like, “I don’t know. Uh, isn’t it what criminals use to buy drugs on the dark web? Something like that?” Actually, no. And just to clarify, cash remains the king of crime around the world. So, considering that Bitcoin is not understood by about 97% of the population, why hasn’t it gone away, gone to zero, or been banned by the government yet? Understanding the answers to those questions is what has already made many people Bitcoin Millionaires and even Billionaires. The one question for most is, will you be one of them? If so, the time for doing so is quickly running out.

Simply put, Bitcoin is the world’s first digital currency. As easy as it is to send an e-mail to anyone in the world in an instant, so it is to send Bitcoin. Now, I am not going to get into an entire description of how it works and what gives it its value, as there are ample videos and explanations available online. If you are not willing to give yourself a half hour to learn the what, how and why, then you have no right to criticize or demonize something which will radically and wonderfully help transform humankind around the world in the next five to ten years.

I first heard of Bitcoin in 2013. I immediately fell in love. I spent months reading, learning and absorbing everything and anything I could. I recognized it for what it was and what it is. And, despite the price running up, down and all-around, nothing ever discouraged me or changed my mind. Bitcoin will change the world. But before you read any farther, if you do not understand what it is, please take a half hour to search YouTube and find a video introduction which explains, in simple language, what Bitcoin is. I apologize, but I have grown weary of explaining Bitcoin to people whose exposure has been a headline here or there. Headlines are designed for shock value and clicks, not for facts.

Like anything else, it seems that a great many people follow the herd-mentality. Where ever the rest go, they will follow. Luckily, I am one who will go in the opposite direction and, in this case, I am so glad that I did. It is this herd mentality which the rich and wealthy reply upon in order to grow their wealth. They know that people respond to emotion. Emotion calls upon our most primitive and basic instinct of fight or flight. In other words, it is what’s left over from our days of living as the animals do in the wild. Once people react from emotion, they no longer use their pre-frontal cortex, or, the modern, executive and logical part of our brain. When it came to Bitcoin, and just like the stock market, the herd behaved exactly as expected.

In 2010, one Bitcoin was worth $.01. As of the time of this writing, one is worth slightly more than $6,000. As an investment, that’s most likely the greatest percentage return in the history of the world. But wait! Isn’t Bitcoin DOWN from around $20,000 in December of 2017!? It must be failing, correct? Well, if you are someone who generally follows the herd and now wants to leave, this is your chance.

In the fall of 2017, Bitcoin went from around $4,400 in September, to a high of about $20,000 in December. And, thanks to the herd, people in-the-know became wealthy beyond their wildest dreams! You see, all of a sudden, Bitcoin was on the front page of every newspaper; it was the subject of every news report. The Wall Street Journal, CNBC, Fox Financial News; nearly everything you watched or read, Bitcoin was all they talked about. And, as a result, tens of thousands of people, faithful members of the herd, faithfully reacted with emotion and bought Bitcoin without knowing anything about it.

Some people even did the most idiotic of things to get on the Bitcoin wagon, going so far as to mortgage their homes. This insanity is what led the price to run-up to a level at which informed, level-headed Bitcoin investors knew was being set up to fall. So, while the herd fell frantically for a classic case of “FOMO” (Fear of missing out), smart investors sold their over-priced Bitcoin to this uninformed group who did not know, nor took the time to learn, about Bitcoin.

So what happened? The price of Bitcoin went from $20,000, all the way down to a low last fall of about $3,000. Just as expected, right on cue, the herd, which relied purely upon emotion and panic, now sold their Bitcoin. Waiting patiently on the sidelines were those who knew better and bought it up again, at a bargain, discount price.

For me, while I was happy to be able to acquire more Bitcoin and Litecoin (I am a volunteering member of the Litecoin Foundation, btw. More on that in another column), I was frustrated and quite angry at how people continuously engage in the same predictable behaviors again and again. Everyone wants to build wealth, but few actually take the time to learn the basic principles of how to do it. Case in point: as an educator, in the Fall of 2017 and into the Winter of 2018, I was doing Bitcoin educational seminars. Every seat was filled. Then, once the market declined, no one came. No one was interested. The headlines; the endless borage of ads and news reports came to a sudden end. The time had come to point the herd in a new direction. At a time when people should have stopped to learn about Bitcoin, they stopped caring. All they knew was that the price went down, people lost lots of money. End of story.

Alas, but it was not the end of the story. While it was not the same as investing in Bitcoin when it was $2, $50, or even $250, it was a second chance for second-tier investors who, if they understood what they were doing, could set themselves up for the return of the inevitable next bull-run. And, if history is any indicator of the future, will provide those who educated themselves with the opportunity to create and amass large or enormous amounts of wealth for their future.

Let me end with some important points you need to understand:

One: The market price of Bitcoin is one thing. The tech behind it is another. While the price has been lower this year compared to last, the tech is light-years ahead of where it was last year.

Two: Institutional investors, Big Financial Institutions and Fin-Tech have been working at laying the foundation and infrastructure for a cryptocurrency/Bitcoin future. It’s coming and they know it. A little research and you will see who, where and why.

Three: The Blockchain, which is the technology which makes Bitcoin work, can be used in almost every other area of our lives. It is DECENTRALIZED by its very nature, which will lead to more freedom and privacy in a world which seems to be increasingly run by Big Government and Big Brother.

Four: The biggest benefit of Bitcoin is for the 3.5 BILLION people on this planet who are under or un-banked. With Bitcoin, you no longer need a bank. You BECOME a bank. This will allow half of the planet to be able to transact with the rest of the world; building and creating wealth the likes of which we have never seen. Bitcoin is the evolution and democratization of Money!

For the sake of you and your family, please do not be a member of the herd. Take some time and learn about Bitcoin, Litecoin and cryptocurrency in general. Learn about Blockchain. Spend ten minutes every day following these subjects in the news. And, if you decide you want to invest in any of them, do so only after you can explain it to others and believe in it fully and completely. And, of course, never invest in something you cannot afford to lose. Seek professional investment advice for a licensed investment counsellor (I am NOT a licensed investment counsellor. I am an independent investor. Please do not accept this as expert advice).