My theses for Bitcoin
You may have read similar articles a thousand times, I hope my reasons are different.
As bitcoin had a new all time high this week, I wanted to share why I had high conviction in Bitcoin. In 2020, I invested 25% of my personal portfolio into it. And now my entire crypto asset is much higher than 25%.
My thesis is mainly built upon 3 points:
1. Generational trend
2. Word of mouth marketing
3. Newer generations of products have larger value than its older generation
Generational trend
For this point, I highly recommend this video below from Thomas Lee.
The quick summary is - when the newer generation millennials grow up, crypto are the cool assets to buy, just like gold was in 1970s. Lots of their money will flow into crypto. Pls watch the video :)
Word of mouth marketing
The theory of Crossing the Chasm is still one of the best things I have learnt about. Basically for a product to go from early adopters to main stream, it has to rely on word of mouth marketing. And in the other way, tech products that achieved word of mouth marketing is either great products, or multi-level marketing.
Bitcoin, has achieved word of mouth marketing to some extent. Most of the people who bought bitcoin, just keep talking about it as an asset. With word of mouth marketing, Bitcoin is either going to become huge great products, or go to zero. I do not believe Bitcoin will go to zero, so it has to be the other way - go big.
Newer generations of products have larger value than its older generation
I haven’t found a formal theory for this one, but I tend to believe it.
Many great products, are basically things that have existed before, but in a different format.
Amazon was the internet version of Sears.
Tesla was the electric version of Ford Motors.
Bitcoin is basically the internet version of Gold. (This has become more true after the recent Bitcoin ETFs)
When such newer generation of products replace the older ones, they tend to have a much broader impact in the end, as a result also a much bigger market cap. Therefore, I believe Bitcoin will surpass Gold in market cap eventually.