Bitcoin is one of the most popular and well known of all digital currencies out there. Also known as cryptocurrencies or cryptos for short. At last count there were 1,759 different digital currencies out in the market being mined.
The amount of bitcoins available is finite in that once 20 million have been mined the blockchain they run on will be shutdown by their creator.
I'll be the first to admit I'm no expert on Bitcoin or blockchain technology. It is because of that I do not hold any investments in this crypto space. There are no earnings yet and consequently the companies who mine digital currencies don't pay any dividends. I don't chase shiny objects or shiny new things.
So, I don't understand it, there are no earnings and no dividends.
You are basically buying digital money created out of a series of continually changing algorithms in exchange for real fiat currency.
Best of all a lot of clueless people out there are doing this on their credit card. They end up paying 19% on a digital currency with the hope and prayer it rises in value faster than the interest payments due on their credit card.
It goes without saying that this is not an investment but a pure gamble, a speculation. Even for a speculator like me this is way too risky.
Bitcoin peaked at 20K around February of this year and has cratered to now sit around 9K. It is hard to know from one day to the next what it's going to be worth. Some have said this is the most manipulated market one can invest in.
My heart could never take the day to day price swings so this is why I never throw money at these types of gambles.
If you can afford to lose all the money you bet on Bitcoin then by all means buy some. If you can't afford to lose everything, my advice is to stay away.
Google was the 21st search engine to enter the marketplace. Where have all the others gone? Bitcoin will not survive is my guess. Digital currencies will, but they will be called by a different name. Almost 1,800 currencies out there, they are not all going to survive.
The advantage they all have over fiat money is that there is no central bank controlling their creation and inflation. Do you think that banks and governments are going to let this lack of control continue. I'm sure somewhere bankers are huddled trying to figure out a way to stop it.
I highly doubt they'll win out completely when it was because of their corruption and manipulation Bitcoin was created. This is a way around the central banks control. The concept and technology is sound but to me the investment just isn't. I don't see the case for it at the moment.
I'm with Warren Buffett, Kevin O'Leary, Jim Cramer and Tony Robbins who all say it's just a roll of the dice. If you don't understand how something works then just don't buy it.
Buffett goes on to say that Bitcoin is "basically a mirage". "The idea that it has some huge intrinsic value is just a joke". In fairness he has been wrong before and missed investment opportunities in Amazon and Google.
Crypto enthusiasts are just gamblers and the bet is that someone else will come along and pay more for their coins than they did. This is also known as a greater fool theory. You are just buying on a hope and a prayer. This is not investing.
When you buy a house or a stock or bond they have value. Over time they all rise in price and are worth more than when you bought it. They have a market history to provide you with that information.
Whether a decentralized digital currency payment system like Bitcoin, totally detached from the central banking cartel and without anyone to administer it's control will last, is a big gamble.
Most people gambling on digital currencies are experiencing FOMO. I don't know everything but I do know this is NOT going to end well for a lot of crypto pumpers.
Do you own Bitcoin?
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