Buying Bitcoin - Stocktrades Canada

I’ve been hesitant to invest in Bitcoin, largely due to the fact that over 70% of its circulating supply is held by just 0.01% of its owners. This concentration of ownership seems to give a small group of people substantial influence over market dynamics, which VERY feels risky.

Would it be wise to approach Bitcoin with the mindset of only investing what you’re completely prepared to lose?

I’d love to hear your perspectives on why this ownership disparity might not be as concerning as I perceive it to be. I’m very interested in starting a position, but this hesitancy has held me back.

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Asked on December 29, 2024 8:33 pm

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Private answer

A significant portion of Bitcoin is held in wallets belonging to exchanges (e.g., Binance, Coinbase). These wallets represent the holdings of millions of users, not individuals. So, the actual concentration among private individuals is less severe than the statistic suggests.

In addition to this, many wallets with large Bitcoin holdings belong to early adopters who bought or mined Bitcoin in its infancy. Some of these holdings include "lost coins," where owners no longer have access to their wallets, reducing the supply in circulation.

As to your question about willing to lose, yes that is absolutely the way you should go about it. Initially, I invested 4% into Bitcoin in 2021, with the idea that if it goes to $0, my portfolio would be fine. That number for some could be 2%, it could be 10%, but you need to find that level that says "ok, if this goes to $0, I won't sweat it all that much"

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Posted by Dan Kent

Answered on December 30, 2024 8:20 am

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What is the best & most secure way to invest in bitcoin?

(Rick Belau at December 31, 2024 12:45 pm)

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