Is Bitcoin or any other crytocurrency a wise investment? I have invested a little Bitcoin and Bitcoin Cash. They go up then down and back up. Is another crypto currency better or is this too risky for a small investor. I’m 70, just retired from Pastoring and looking for a way to supplement social security.
Bitcoin or any other crypto currency is an incredibly volatile place to put your money. Its value fluctuates significantly, increasing its risk, and its value proposition is entirely unclear.
In my opinion,the only true value of bitcoin is (a) hype; and (b) a tool for money launderers and organized crime. That is only my opinion, but to buy an asset I recommend that you truly understand and believe in the actual true value of the thing itself. The value of holding Apple shares is that you would expect Apple to continue selling products, earning income, and distributing that income in the form of dividends. The value of holding BTC is... selling BTC to someone else?
Consider that even traditional currencies are quite volatile, and are considered high risk and not for long term investment because they are a zero sum game - if Canada's economy strengthens + US's economy strengthens, someone holding either currency earned nothing. No currency is typically recommended for long-term investment, except possibly by some as a hedge against perceived risk in your own internally held currency [ie: pre-brexit vote, a UK person holding USD may have provided some diversification against the risk of exactly what happened the following month].
Is bit coin or crytocurrency a wise investment?
Even the few actual money managers who suggest allocating some amount of your assets to crypto place an upper limit of 1% of your assets and the rationale is FOMO (fear of missing out).
The blockchain was a real breakthrough idea. An immutable, distributed, publicly verifiable ledger is a brilliant idea with untold utility. Will bitcoin really be the specific technology that's utilized by financial markets? Will ethereum, ripple, bitcoin cash, litecoin or whatevercoin rise to real promanence? Will the existing financial markets arrange their own semiprivate networks to utilize distributed ledger records? It's hard to know. But I do know that I'd bet everything I have that I will not be buying coffee with bitcoin in 20 years.
I personally have no investments in bitcoin but any wise investor can recognize the merit of bitcoin and its systems. Bitcoin is a very promising currency as it brings us a step closer to the utopia idea of a single global currency as cryptocurrencies are not tied to a government or area. The main grievance for most careful investors is that there are very little tangible variables that we can read into that affect the price of bitcoin, the people simply decide what its worth to them and so if you want to have a successful educated investment it will be very hard to calculate risk in a bitcoin investments due to lack of reference. On the contrary, national currencies are backed by the nations prosperity and economic indicators meaning a good look at the quarterly reports from the central bank can give you a good idea of the currency's value'.
I do not want the whole outlook to be sour grapes and so the good news is that if you are interested in Bitcoin and the future of decentralized technology, you should take a look at investing in the blockchain system that Bitcoin is based on which is essentially a decentralized web of information blocks that are encrypted and spread across networks making it not only very secure but the future of autonomous technology such as self driving cars and aircraft. The yield on Blockchain investments is through the roof as investors are jumping on the Blockchain wagon. In the end, it is up to you to see what you believe in most and what you see being most profitable.