While I’ve broached the topic before in previous articles, I don’t think I’ve gone into great detail on where I think Bitcoin fits in today’s economy. When Bitcoin first started out back in 2009, every single investor out there thought it would be just a fad and would soon be removed from the conversation. Can you keep a little secret? I personally was one of these believers.

Oh, how wrong we were! Bitcoin currently celebrates its achievement of staying this long by reaching and setting a new 2021 all-time high. To be perfectly fair, Bitcoin has been scoring quite a lot of all-time highs lately, it kinda makes it lose its meaning. Bitcoin invaded the lives of every investor out there when it first started, back then, it was simply a token, an experiment. Now, however, this little experiment is a resounding success to the point that it inspired many other tokens to pop up.

So that brings me to my topic, where does Bitcoin fit in today’s economy? Is it just another asset or is it more than that?

Well, let’s take a look at the biggest advocates for the Cryptocurrency Micheal Saylor. Micheal Saylor is the co-founder and CEO of MicroStrategy, a company which provides business intelligence, mobile software, and cloud-based services. Just in 2020, MicroStrategy bought more than $1.3 billion worth of Bitcoin converting it’s large deposit of cash into the Cryptocurrency token. This has worked wonders for the stock of the company which is climbing right along the coin.

Saylor even went ahead and tried to convince Elon Musk, CEO of Tesla, to invest his company’s cash into Bitcoin saying that he’d be doing his investors a favor. While the outcome of that conversation is not available to the public, it was an interesting insight to see how more and more institutions are investing in Bitcoin.

Bitcoin

In an interview with CNBC, Micheal Saylor talked about how large S&P 500 companies, such as Apple, Google, and Amazon hold so much cash. He makes the point that due to inflation, that money that is sitting around is losing value really fast. He said that these companies need to change cash (as a liability) and turn it into an actual asset (by buying Bitcoin).

Mr. Saylor goes even further in his talk with CNBC to say “Bitcoin is the first engineered safe-haven asset.” Let that sink in for a moment. First engineered safe-haven! This kind of description of Bitcoin is something new, we’ve all been accustomed to the natural safe-havens in the economy USD, JPY, CHF, Gold, and Treasury Bills. Now, we need to add Bitcoin to the mix, which is something BIG.

Saylor goes even further to say that investors and institutions are losing faith in Gold and Sovereign Debt. Now, I personally can agree on the second point, but Gold losing its status as the elite safe-haven, I just can’t fathom a world where this is true. While I believe that Bitcoin can rival (note my choice in words) Gold, it will never replace it, cause at the end of the day, Gold is physical, Bitcoin isn’t.

When asked about the volatility of Bitcoin, he mentioned how many institutions are entering the market in search of a new safe-haven and Saylor notes that with more institutions coming into the market, the characteristics of that asset is going to change, which can make it much less volatile than it used to be. Saylor says that Bitcoin is “Engineered, Synthetic, Pharmaceutical Grade Gold.”

It’s not only Saylor that has become a fanboy of sorts of Bitcoin, in fact Wall Street maven and founder of SkyBridge Capital – Anthony Scaramucci – is the most recent CEO to join the Bitcoin bandwagon. Speaking to Bloomberg, Scaramucci says: “Bitcoin is better at being gold than gold is at being gold. It’s easier to store, it’s harder to steal, it’s more portable, and so therefore, it’s become the ledger or the storage of the future in terms of the storage of value. It’s early innings.The environment became more compelling, it was easier to store, better regulation — we are a very big believer that Bitcoin is effectively going to become digital gold.”

He goes even further to describe Bitcoin’s current volatility as Amazon stock in the early days of going public. He says that “This is something that people need to Buy and Hold.” HODL anyone?

Over the last few months, several Wall Street veterans have endorsed Bitcoin and saw it as a potential inflation hedge. Some of these big names include Stanley Druckenmiller, Alan Howard, Paul Tudor Jones, and Bill Miller. With institutions buying in big quantities, the Bitcoin (BTC) liquidity crises intensify further with a supply shortage. The only way for BTC is up!

So where does Bitcoin factor in today’s economy? The way I see it, it’s going to be a major safe-haven for everyone involved in trading. It will be the digital gold like Saylor said and it is here to stay.