Bitcoin is all the rage. If you have not heard about it yet you will soon. Some call it the future of currency others claim it is nothing more than hype and a Pump & Dump scheme. The block chain technology is real and looks promising but let’s ask a few questions about Bitcoin. If you could convert your dollars into and electronic currency would that process somehow add value to your money?
In January 2017 Bitcoin was trading at just under $1,000 today (December 7th 2017) it was briefly up over $19,000. It is up 2,000% this year alone. On 22 May 2010, Laszlo Hanyecz made the first real-world transaction by buying two pizzas in Jacksonville, Florida using 10,000 Bitcoins at .01 per coin or about $100. Hope he enjoyed that pizza. Today those 10,000 Bitcoins would be worth $170,000,000. That is 170 MILLION.
Think about this… If you could take your money and change it into a digital currency would that simple act create more money? If you could invest $100 and end up with $170,000,000 in the process, why wouldn’t you and every nation on earth do o the same thing? Sounds like a plan for paying off our national debt if you ask me.
Why not start your own Crypto Currency? Many others have already done so, there are now over 1,300 Crypto Currencies. Does this type of currency pay an interest rate? Does it pay a dividend? Does it create anything of value? Is the real value increasing because there are more buyers than sellers? if that is the case what happens when there are more sellers than buyers or worse when the wallets are hacked. Is today’s price a bubble like the tulip or beanie baby craze? Will it go higher? Other Crypto Currencies are not up as much does Bitcoin have a secret sauce that other Crypto’s are missing?
Sure Bitcoin could go higher but it could also come crashing down. The old saying buy low sell high is always good advice, Bitcoin is SKY HIGH. Nothing wrong with taking profits if you have them. Buyer beware don’t invest more than you can afford to lose. Remember things that crash go down faster than they go up. Getting out is often harder than buying when a bubble burst.
This Sunday 12/10/17 Bitcoin futures will start trading this will allow investors to short bitcoin this means investors will be able to sell it short and bet it will go down. This will be the first REAL test for support of these high prices. If I were a betting man I would bet or short this trade at the current levels. The odds of Bitcoin going up another 2000% is slim the odds of it pulling back 50% or more are high.
If you really want to invest in this technology you might want to consider other Crypto Currencies like Bitcoin Cash, Ethereum, Litecoin, Ripple, Dash, Populous and others that have not had such a huge run up in price, they are a much better value, buy after a major pullback. Proceed with caution.