Have you checked the Bitcoin price recently? The cryptocurrency's price has risen nearly 40% this year, and is inching closer to the pandemic-era record of about $69,000 per coin.
Some of the most dedicated investors in Bitcoin have a creed – HODL – which is basically an acronym for “holding on for dear life.” It's a mantra to never sell your Bitcoin, even when the price is in the dumps as it has been for most of the past two years.
Well, those HODLers are rejoicing now.
Sean Longstreet started investing in Bitcoin in 2017, when the price of one coin was around $17,000. The musician and artist continued to buy, through multiple cryptocurrency winters – periods when Bitcoin collapsed to alarming lows.
“When things go wrong, you have to lie to your conviction, and there is a saying, ‘When there is blood in the streets, you buy.’ So I didn’t sell, I cried and held on to it.”
Longstreet won't tell me how much bitcoin he owns — that's a taboo question for bitcoin traders — but he says he owns more cryptocurrencies than he has in stock.
Although it may be tempting to say to skeptical friends and family, “I told you so,” he has learned to resist that urge.
“It causes a lot of stress if you try to take your family and something happens, something bad happens,” he said.
Bitcoin's recent surge is mostly due to the Securities and Exchange Commission's (SEC) approval of Bitcoin exchange-traded funds, or ETFs for short. ETFs allow investors big and small to put money into Bitcoin, without having to touch a cryptocurrency wallet or actually understand the blockchain.
Ryan Rasmussen is a researcher at Bitwise Asset Management. More than $1 billion has been pumped into Bitcoin ETFs.
“Now anyone can open their own brokerage account and, with the click of a button, allocate Bitcoin. This was Bitcoin's IPO moment.
Pension funds, hedge funds and independent traders say, “Sure, I'll participate in a Bitcoin IPO,” especially when the price goes up.
But Lee Rayner of the Duke Center for Financial Economics said more major financial players getting into cryptocurrencies come with risks when the next Bitcoin winter inevitably comes.
“You have now created an interstate highway connecting the traditional financial system to the cryptocurrency economy, so that a problem in one can easily spill over into the other,” he said.
For his part, Bitcoin user Sean Longstreet agrees that there will be another pullback at some point, but he does not plan to sell anytime soon.
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