Warning - Investing in Bitcoin Read this, First!
So check this out.
Bitcoin is one of the fastest growing cyrpto-currencies ever. There are exactly 21,000,000 bitcoins in the world and no one knows who the exact inventor of Bitcoin actual is. In fact there are no physical versions of bitcoin everything is digital and transactions are being used world wide every day. You could set-up an account and "get in" this very moment. Interesting or nah?
What fascinates me more than the market cap (133 Billion) as well as how volitile the value of Bitcoin can change is more of how it become wildly notorious and why. Every single one of my mentees has asked me at some point what is my opinion of the crpto-currency Bitcoin? Millions of people have spent their money on Bitcoin and some have made huge amounts investing in it while the majority of people around the world have lost massive amounts of money. I’m a numbers guy so lets talk facts. The highest to-date, as of me typing this, price for a single bitcoin was $19,203. A few weeks later Bitcoin is trading around $8,400 and trending downward. However a few weeks before its to-date peek it was trading around $3,300 per coin. If you were to invest in Bitcoin in its 2nd major wave around $2,500 and sold at its peak of $19,203 you would have made 7x your initial cash investment. You my friend are a rock star! But for everyone else you'd might want to keep reading.
So what did I tell my mentees?
My advice to my mentees is the same advice I would give you sir or madam. What’s your goal? Are you looking to make 2x, 5x or 10% on your money? What is your time frame for the return on your money? What other things are you spending your money on and what is your primary source of income? My advice changes based on the individual of whom I speaking with. Not a single one of us is in the exact same space as another therefore my response has not and would not been the same. Unfortunately the U.S federal government has not placed regulations around bitcoin yet for un-educated or un-accredited investors as it has in other investments. Leaving tons of people who don’t know what the heck they are doing loosing hard working cash to Mr. Market.
For the average individual I would say Do not Invest in Bitcoin, right now is just not the time. There are other things I would suggest you use your cash for. In the case of the people who are placing second mortgages on their homes to purchase more bitcoins. You are crazy! Don’t believe me Google it. I’ve been asked why is now not the time to invest in bitcoin? First of all, its arguably not an investment and more of just speculation and hopefulness. There isn’t enough historical data in my opinion to make a wise decision on trends. Secondly, when the jobless 23 year old who rides a bike to pick-up soccer and leaches off all his friends is spending his money “investing” in something and not paying his friends back. Its’ probably not the best place to put your money. By the time everyone knows about something its too late, you’ve missed the bus and need to look else-where before you take a huge L.
Because you are taking the time to read my writing I’ll drop some knowledge on you. When I invest in something I look at 2 out of the multiple positions of an investment cycle. I look for earlier stage investments as an early adopter. This is the the most profitable time to invest in a new offering. This would have been back in the day around 2013 to mid 2016, market price around $1,000. The 2nd position I would invest is once it’s gone through multiple market cycles and developed strong trends similar to FOREX and the stock market. This way I can utilize my experience trading FOREX and the stock market to predict where the price cealings and floors are as well as a few other things. If I can't get in on these 2 positions its not worth it for me. Unless you are independntly wealthy, I suggest you sir and madam Do not Invest in Bitcoin! Right now its not the right time, but maybe tomorrow it will be. Just maybe.