The most common question I am getting right now involves bitcoin.
I get asked all the time by the community what my thoughts are on Bitcoin. I’m asked is bitcoin a good investment. Is bitcoin safe? Should I buy into bitcoin?
A couple days ago it passed $39,000 a coin or per share. Today I saw it was trading around $31,000. Bitcoin hit all times highs over and over and over again and then dropped. Why?
The new incoming administration and Janet Yellen are not big fans of crypto currency. Also, it probably was an unsustainable run up based on trending news and not actual increased value.
I think for many people in my community, buying a $31,000 coin seems very high and very out of reach. Bitcoin, like gold and silver seems to be reacting to the fears of the global and US economy.
I think with a new administration coming in there was significant fears of market correction. However, as of today, the markets are holding steady.
However, it is very expensive. I don’t have anything against bit coin but $31,000 a share is not within reach of most people and if it is, how many eggs are you putting into that basket.
What if that basket crashes?
I remember watching bitcoin rise from $5000 to $19,000. I had clients asking if they should get a loan against their house to get in on the new digital gold rush. Of course I told them no or that I wasn’t going to be the reason they got involved.
Well in short order, Bitcoin rushed to $19,000 and then dropped down to around $3000. I can’t imagine the people that bought at or near the top only to watch their money melt away.
So if you are interested in bitcoin, I would say do your research. You might even be able to buy fractional shares through Robinhood, but for me I think it might be too high. Even if it went from $31,000 to $39,000, that is only a just over a 10% gain, but if it went from $31,000 back down to $10,000 that would be devastating for most.
If and when bitcoin sees a pull back or drop, I will consider riding it back up, but until then, I’m not putting money into bitcoin.
This doesn’t mean you should or shouldn’t invest, I would just say to do a lot of research and be cautious when something hits all time highs over and over again. It could mean it is running out of steam.
Anyway, you guys asked and so I answered.
I hope you found this video valuable. I sure appreciate you being in my community.
Don’t forget, you are amazing.
