Ever since I was a young lad I’ve always LOVED buying and selling stuff.
My grandpa Hal was an auctioneer so we grew up around the auction sales. The auctions looked a little different back then – they were limited to the amount of people who physically attended. The crowds were a decent size though, as it was a social outing in the small towns.
Thanks to the online marketplaces and specifically, eBay, you now can sell anything to anyone in the world from the comfort of your home.
Last week I picked up this old Nike putter on a local marketplace for a great price. Purchasing things at a local level usually allows you to get a better price because the market is smaller.
There is a HUGE opportunity or arbitrage by purchasing items at a local level and selling it on a bigger scale.
For example, purchasing an item a local garage sale for cheap cheap.
Then selling it on an online marketplace in a big city for a higher price.
OR selling it on eBay for an even higher price!
The bigger the market, the bigger the demand, and the higher the prices you can get for the items.
Where the heck am I going with this?
Bitcoin has a global market and a global demand. There are people all around the world wanting to purchase Bitcoin. The liquidity is MASSIVE – which is why some banks are now recognizing it as collateral or security for financing. They know that if you are unable to make your loan payments, they can turn around and sell your bitcoin almost instantly to recover the amounts.
Compare this to a commercial building in Winnipeg for example. Typically, buildings or other hard assets are used as collateral for taking on debt. If the bank needed to sell the building they probably could – but it takes time. The sale of a building requires realtors, lawyers, banks, time, etc. And most importantly it requires a buyer. In this case, the market is limited to any person or entity wanting to purchase a building in Winnipeg.
What if no one in Winnipeg wants to buy the building? Will the bank have to take a bath on it just to recover some of the outstanding debts?
There are many different opinions on both sides of Bitcoin – but it’s impossible to argue the liquidity and global demand for it. This is a HUGE selling point and damn good reason to hold some, in my opinion of course.
Global demand. Massive liquidity. Fixed supply. Decentralized network. Inclusive to anyone with an internet connection. And it requires energy to create new supply.
It just makes sense.