Ever considered investing in Bitcoin or alternate cryptocurrencies like Ethereum? I’ll be blunt; I haven’t. I know there is/was a lot of hype around crypto but I simply don’t get it.
Ask everyone in your Facebook network where they can spend bitcoin and you will get crickets. Considering it is a currency you would think it would be easy to spend. There are companies and individuals that accept crypto but it is such a small population that there is no point in needing tokens. Furthermore, companies like Steam quit accepting Bitcoin because it was so volatile it wasn’t worth their time or real money to constantly update the prices of their products.
What part of our economy even justifies putting a dollar value on a blockchain token? If you bought Bitcoin do you know where it is physically stored at? If you woke up one day and your tokens were deleted could you hold anyone accountable?
These are some of the reasons I don’t touch cryptocurrency:
- Highly speculative.
- Highly volatile.
- Unregulated (which is actually the point)
- How do you calculate its intrinsic value?
- It’s a currency that I can’t spend.
- Do you really understand where your digital wallet is and how it works?
With stocks I understand that I own part of a company and my returns are based on their performance. Bonds represent a loan to a company trying to raise capital with a strongly backed return rate. But cryptocurrency is like investing in tulip bulbs in the 1630’s, it doesn’t make any sense.
Please feel free to ask questions or leave comments below! I’d love to hear how Crypto investing has worked for you.