17 Reasons NOT to invest in Bitcoin according to Florida Financial Advisor
Florida Financial Advisor/Planner talks 17 reasons NOT to invest in Bitcoin:
- Bitcoin has no platform. It cannot become successful merely through the power of its abstract ideas. Unless there is primary use case, a single platform on which Bitcoin is the primary medium of exchange, Bitcoin will never be widely used.
- Bitcoin is an excellent answer to fiat currencies that are highly controlled and manipulated.But gold, land, art, and collectibles are also great options. Bitcoin is NOT the ultimate solution.
- Bitcoin is not currently a viable currency. Not many merchants accept Bitcoin, and nobody uses it as a store hold of wealth.
- Bitcoin shows all the signs of a speculative bubble. A lot of people are buying it out of greed.
- Bitcoin could potentially lose competition to another nonfiat cryptocurrency.
- Bitcoin can come to zero if there is no demand one day. Bitcoin’s “success” or utility will ultimately depend on society’s demand.
- Bitcoin is incredibly risky … so if you do invest, you should go in expecting to lose all of it.
- Bitcoin is clearly the current top coin in terms of longevity, market cap, and volume and it is notably also the most expensive.
- If Bitcoin is like the Microsoft of cryptocurrency, then an investor needs to be prepared to take a loss or sit on a loss for a while if the market goes down. That all takes a certain type of mentality and expendable funds. In other words, there are psychological factors to consider alongside economic ones.
- Although there has been a large amount of media in relation to the price of Bitcoin, many people purely see Bitcoin – and other cryptocurrencies – as a speculative bubble which is going to burst.
- The best advice is to be prepared to lose every penny you invest in cryptocurrency, it probably won’t happen, but it could, and you need to go into the cryptocurrency with some stored-up resilience. If, with that warning, you want to ease into cryptocurrency investing. Consider taking no more than 1% of your investable funds.
- All investment strategies should be diversified, think of crypto investing as further diversification. Do your research, don’t go in blind. There is a lot of material out there to read and educate yourself.
- The cryptocurrency market has been very volatile since its inception. The price of Bitcoin can swing up or down hundreds of dollars in a day, and the price more than quadrupled in 2017.
- Even if cryptocurrency is a good long-term bet, we don’t know if Bitcoin (or any of the top coins) will be the one that sticks around.
- The blockchain, introduced by Bitcoin, is by no means limited to use for a currency. It can automate all kinds of things like contracts and even voting. There is a lot of thinking and coding going on to explore those other uses.
- The US Dollar is one of the most powerful currencies in the world because of the properties of the United States economy. The Dollar succeeded because the United States economy succeeded, not the other way around.
- Fiat currency has value since there is an economy that uses it and therefore lives that are significantly affected when it fails. This backs all government issued money. Gold and bitcoin are not the same. Gold has its value simple because someone will buy it. Same for bitcoin.
So bitcoin is no replacement for fiat.
And it’s no replacement for gold.
And it has value simple because there is a buyer for it.
Michael Minter is an independent financial advisor, managing partner of Mintco Financial with offices in Tampa,Fl and Buffalo, NY.
Call 813-964-7100 or 716-565-1300
Editor’s note: Investing in crypto coins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.