Like many, when I first heard of bitcoin, my reaction was “Why would anyone invest real cash in magic internet money?” It was worth zero — backed by nothing. And, like a fool, I was keen to point this out to anyone who would listen. But still, I was curious what the buzz was about, so I continued to keep an eye on it until, in 2015, I had a mental breakthrough. I was listening to a podcast when Wences Casares made a statement that went something like this:
“The miracle of bitcoin was going from zero to one cent. The debate of whether bitcoin has value has been resolved. The market has already assigned it value, so we can now only argue over how much it is worth.”
Bitten by the bug, I spent months reading anything bitcoin-related, talking with friends, developing an investment thesis and assessing probabilities that bitcoin could actually achieve these outcomes. Like any good MBA graduate, I quickly worked up a SWOT analysis (strengths, weaknesses, opportunities and threats) and a simple pricing model that compared the number of network wallets to price. At the end of this exercise, there was only one answer: It was prudent to invest a small percentage of my portfolio in bitcoin. For me, I chose 1 percent of investable assets. And now, like all other bitcoiners, I wish I had invested far more.
