We are in very peculiar times at the moment, in particular, we are seeing a huge increase in interest and demand for cryptocurrency. Essentially speaking, this currency is special because it does not require any intermediary to transact and the number of coins that exist in the world cannot be increased or “printed.” That is not the interesting part though, what I would like to expound on is the hype over Bitcoins when its price goes up sharply. I have never seen people get interested in any item when prices go up, instead, common sense dictates that price is exactly inversely proportionate to the value of the asset. This post intends to use an investor’s perspective to analyze this situation and help clarify why I will not be pursuing this asset class.
Bitcoins can be infinitely fractional
Many argue that the number of bitcoins will never increase hence its value can only increase over time due to its rarity.