Should you invest in Cryptocurrency?

Bitcoin just hit $13,000! Is it too expensive to buy right now? Some people say it is going to grow to $100,000 or even $1,000,000 in the next 5-10 years, while others say it is a bubble ready to burst. I have a theory on it with the limited research I have done.

I first heard about bitcoin back in November 2013. My friend had three coins he bought for $210 that he sold for $700+. It seemed like the wild west to me at the time. I ended up forgetting about it until this year. I started following it closer when it was around $2,000 because a friend of mine was putting all his money into it. Even though I have followed  Bitcoin since it was $2,000, I have yet to pull the trigger on an investment. I did invest $500 in Litecoin about 10 days ago, and I have already seen about a 10% gain. What if I had invested $10,000? $20,000? Should I be kicking myself? My answer is no because this investment is still speculative. Optimists are sure it is going to be the new world currency, while old school investors like Warren Buffett call it a "mirage." I believe there is a reason why Buffett is staying away from Bitcoin.

In the research I have done on Buffett, I found he has a very simple philosophy when it comes to investing: he invests in companies that produce consistent cash flow i.e Coca-Cola, Kraft Foods, ect. He doesn't put his money into investments that do not produce a product. He explains it better than I do in this video.

I understand Bitcoin is different than gold because it has the potential to become a global currency that allows us to cut out the middleman (banks) when making purchases or transferring money. I also think it will rise to $30,000 -$40,000. But I think ultimately it will crash. It may rise back up in a few years and become the world currency, but a crash is inevitable in my opinion. Again, I do research Bitcoin daily, but I am by no means an expert. Take my prediction with a grain of salt. I think Bitcoin will crash with the market, when the Dow is at $28,000-$30,000 and the S&P is at $3,000-$3,200.  This still gives us all time to make a lot of money in whatever investments we have in right now.

What do you think? Let me know in the comments below.

Comments

  1. Interesting info Evan. I was wondering: Is Bitcoin back by anything, ie dollars, gold . . .? Do you buy Bitcoin with dollars?

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  2. Bitcoin is its own form of currency, so no it is not backed by anything. It is similar to gold in that aspect

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  4. I would suggest doing research on crypto and how it works instead of warren buffet. BTC (as the most popular use case) has proven ALL the doubters wrong time and time again, why continue to doubt? At time of writing BTC is trading at $16,460...again a feat that very few thought would ever happen. Since the start of 2017 BTC has seen 2,026.57% growth and the year isn't even over yet.

    Of course there will be a correction, and hopefully it's big so people can re-enforce their position. Blockchain and digital currency is here to stay and will touch almost every industry we know similar to the way the internet did in the 90's and 2000's. Crazy thing is, most people won't even notice it.

    BTC will also never be a currency as it's original proposal intended...it is already much more than that. It has brought to light a highly disruptive technology and become the best "store of value" asset class at the same time. Alongside it's recent price action that only solidifies the influence this technology will have on our economy (assuming you're not buying into the pump consipracy theories).

    That being said, BTC has a lot of flaws such as expensive fees, slow transaction times, difficult improvement process, etc. and many of the tokens being developed today improve on these short-comings (with great success). My bet is on the future of blockchain and the companies built around it, not BTC. (Although I do own BTC and I'm glad I do).

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  5. Thanks for the feedback Rob. I am still new to Bitcoin and Blockchain Technology in general, but am intertested in learning more

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