Bitcoin is currently breaking all records. For months now, the price of bitcoin has been rising at an ever-increasing rate. Due to its rapid growth and increasing popularity, many jump on the hype train, perhaps due to fear of missing out. Should you jump too?
In this second part of the Expert Review series experts give their blunt opinion about Bitcoin and its future. They talk the pros and cons of buying bitcoin, each from their own perspective. Read part 1 here.
1“If he had taken the bitcoin, it would now be worth $1.6 billion!”
By Dan Nainan – Intel engineer turned comedian, TED speaker, Tesla owner, performed in 28 countries & for Obama, Trump, Clinton, Woz, Bloomberg.
In 2013 I became aware of the bitcoin phenomenon, and of course, as with many things, I wish I had learned about it much earlier. In the beginning, it was possible to mine bitcoins on a regular laptop. There was the case of a poor soul in Wales who threw out $120 million worth of bitcoin on an old hard drive. He had mined the bitcoin on his laptop, and the only reason he didn’t mine more is because his girlfriend was upset about the noise the computer made at night. He went to the landfill to try to find the hard drive, but was confronted with a few football fields’ worth of knee-deep trash, so he gave up. I understand that because of the recent surge in the price of bitcoin, he’s gone back to the town and offered to give them 10% ($12 million) if they will let him dig it up.
In May of 2013, I heard that the Bitcoin Foundation was holding a conference in San Jose, California, and I wrote them and asked them if they might be interested in having me MC and do comedy. They wrote back, very enthusiastic about my idea. We negotiated a rate, and they asked me if I wanted to be paid in cash or in bitcoin. Being the gambler and risk taker that I am, I of course chose the bitcoin. At that time, bitcoin was worth $130, and the organizers of the conference helped me set up a Coinbase account and sent my payment for the event there. This would eventually turn out to be the highest-paid show I’ve ever done, by far.
I flew to San Jose for the event, and it was packed, with about 800 people. During my act, I asked how many people were Democrat, and there was dead silence. I asked how many were Republican, and again, silence. This was truly puzzling; having no one cheer for being Republican or Democrat had never happened to me before. I then asked whether everyone present was independent, which I thought was unlikely, and again, silence. Somebody in the front row suggested I ask how many people were libertarian, and I did, and the audience erupted in cheers. This absolutely blew my mind, and of course it reaffirmed the old saying that one should know one’s audience. It made sense, though, that bitcoin enthusiasts would be libertarian, because it is after all a cryptocurrency that isn’t regulated by any government.
I also had the distinct pleasure of introducing Cameron and Tyler Winklevoss, the twins who as you recall started Facebook with Mark Zuckerberg. They were both extremely nice. It was really great to get to meet them and hear what they had to say about the future of bitcoin.
When I got home from San Jose, I researched bitcoin and learned as much as I could, and I decided that it was a great investment. So I bought more, using Coinbase (and fortunately, not Mt. Gox, a bitcoin exchange that went bankrupt and lost $9 billion worth of its investors’ bitcoins). About a year and a half later, bitcoin reached $1,200, and I thought about selling but decided against it. It went as low as $800, and has since recovered and as of this writing is worth $17,000. I’m happy to say that I still have all the bitcoin, what I was paid at the conference and what I bought on my own. Some people are saying that it will get to $1 million. I sure hope so!
Here’s the ultimate bitcoin story. I have a dear friend who has a government job and videotapes Indian weddings on the side, charging as much as $5,000 for his services. In 2010, he was approached by some folks who were putting on a bitcoin conference at a hotel in the Washington DC area. He told them that he was able to provide them with video and other equipment for the event for only $4,000, which was way better than the $20,000 they had been quoted by the hotel. They hired him, and they told him that they could either pay him $4,000 in cash, or $6,000 in bitcoin. Unfortunately, he took the cash. If he had taken the bitcoin, it would now be worth $1.6 billion!
UPDATE: Last week, I logged into my bitcoin wallet for the first time in 4 1/2 years, and I was absolutely ecstatic to find that I had bought about 60% more bitcoin than I originally thought!
2“The ICO market is akin to the wild west”
By Chris Gregorio – Chris Gregorio is founder of alternative currency Swift Demand. He has a huge passion for startups and entrepreneurial ventures.
There is a large lack of regulations around ICOs so the best advice for the risk averse is to simply not invest. The SEC is right to warn about ICOs and has placed some restrictions on them in terms of the legality allowing them to represent securities. More regulations are likely to come in the future, but currently the ICO market is akin to the wild west. Bitcoin is simply the leader of the alternative currencies and precursor to the ICO movement. Unless a currency is regulated by a standing government that you trust, invest at your own risk.
3“Once Bitcoin price stabilizes a bit we will see much wider adoption”
By Timothy Kassis – Timothy Kassis is researcher and instructor at MIT. He has deep understanding and passion across a broad range of bioengineering challenges.
See Timothy’s LinkedIn profile
[I see bitcoin] not as a short-term investment as the price of Bitcoin is very volatile at the moment, but as a long-term asset. I think there are some technical and regulatory challenges to wide Bitcoin adoption as a currency, but these are all being addressed (slowly but surely) and once Bitcoin price stabilizes a bit we will see much wider adoption and demand for Bitcoin will grow (simply because it will be a convenient method for cross-border fee-less transactions).
I personally have had a bad experience investing in Bitcoin in the past. Not because of the technology itself, but because of the trading platform I was using at the time. Mt Gox was the largest trading platform and for a yet to be determined reason went bankrupt and I lost my investment at the time. Something like this is less likely to happen with American-based exchanges like GDAX.com since they are FDIC insured up to $250,000.
4“Bitcoin is the Tulipmania of the 21st century”
By Robert Johnson – Robert is President and CEO of The American College of Financial Services in Bryn Mawr, PA. The College is a non-profit, accredited, degree granting institution.
Bitcoin is for speculators, not investors. If one wants to bet on the price of bitcoin advancing, recognize that it is just that, a bet. The most disturbing headline I have seen lately was on CNBC, stating that people were mortgaging their homes to buy bitcoin.
In my opinion, Bitcoin is the Tulipmania of the 21st century. One of the most famous bubbles in market history, in the 1630s in the Netherlands, tulip bulbs were bid up to absurd levels. At the peak of tulip mania, in February 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftworker.
Bitcoin has no underlying value – stocks have earnings and pay dividends, bonds have a coupon payment and bitcoin has nothing but the hope that you will be able to sell it for more than you bought it for, the greater fool theory.
It is fitting that we talk about Bitcoin now, as the prices of bitcoin are being driven by irrational behavior by market participants. It is particularly fitting that we discuss behavioral biases now, as this past weekend, Dr. Richard Thaler of the University of Chicago received the Nobel Prize for his work in behavioral finance. One behavioral bias is recency bias. Investors should recognize that as human beings we are not purely rational, but succumb to behavioral biases. Recency bias is the behavioral malady that we tend to overweight recent events and underweight events further removed. For instance, Bitcoin has advanced dramatically in recent weeks, so investors assume it will continue advancing. Investors forget how desperate they were during the depths of the financial crisis.
5“Don’t mortgage your house in order to buy bitcoin”
By Kevin Ward – Financial Adviser, Entrepreneur, Speaker, Private Investor, Blogger, Husband and Dad! Empowering people to secure a peaceful and successful retirement.
You can’t turn on the news without hearing about how much Bitcoin increased/decreased today. Is Bitcoin in a bubble? No one really knows. All this news attentions helps spark the emotion of *FOMO* (fear of missing out)
Chances are you may not know that much about Bitcoin or the Blockchain technology behind it. If this is the case, it is OK to just leave it alone. Don’t let this mania throw off your personal long-term plan.
Should you buy bitcoin?
It depends. Remember it is pure speculation. You are buying it hoping to sell to someone at a higher price. If you want to invest, only do so with a small amount of your overall net worth. This way if it goes to zero, you won’t have to change your long-term planning. My advice, don’t mortgage your house in order to buy bitcoin.
6“Bitcoin is an incredibly speculative asset”
By Cal Cook – Cal Cook is Consumer Finance Investigator at ConsumerSafety. Cal helps consumers understand the connection between our finances and our general safety and wellbeing.
This is a big topic right now with the price explosion of digital assets like Bitcoin and Ether. It’s important to understand that Bitcoin is an incredibly speculative asset and still a new technology at the moment, so there are a couple of things you should consider before buying Bitcoin:
- For the most part, keeping your Bitcoin on exchanges isn’t secure because a hack of the exchange would leave your coins uninsured and lost. You should educate yourself on how to set up a secure private, offline wallet if you decide to purchase Bitcoin.
- This is an extremely volatile asset. If you have the temperament to sell stocks when the market is down, digital asset investing probably isn’t for you.
- Since Bitcoin investing is so speculative at this stage (more people investing for profits than buying Bitcoin to use it), it would probably be advisable to pay off any debts before buying Bitcoin.
- Don’t invest more than 5% of your net worth, so that even if it crashes the negative effect on your portfolio is minimal.
7“Bitcoin is a currency of lions and cowards at the same time”
By George Gor – George is CEO of Coinidol.com, the world blockchain news outlet, with 1/4 million of monthly views from audience in 174 countries of the world.
Bitcoin is a virtual essence, that is highly influenced by news. It’s a currency of lions and cowards at the same time. The first are looking for independence and freedom from government control. The second one are looking for the option to store funds in safe place, when the economy of their local country is storming. Anyway Bitcoin is a safe place to store money for both. Safety is an excellent quality of currency.
It’s good to store money in safe place. That’s why Bitcoin will have a lot of supporters with time. The bigger is demand, the bigger is the price. It’s good investment now and in the nearest future, during 2 years. It’s hard to predict, what should we wait after next 2 years for Bitcoin. But now it’s time to invest Bitcoin.
8“Bitcoin is never going to be replaced”
By Jason Appleton – Jason is VP of Sales of a national mortgage company and an avid cryptocurrency trader, ICO investor and miner. He is developing his own cryptocurrency management platform.
It seems Bitcoin is going to become the vault of Crypto Currency as opposed to the action coin. In other words, I see the value of Bitcoin rising with the number of new users adopting Cryptocurrency as a viable investment option, which over time will continue to grow exponentially. When you want to make a quick trade, you will pull Bitcoin out to invest in whatever pair you are trading, make your profit with that coin and put it back into Bitcoin for safe keeping and potential increase in value, like a savings account. All of these forks keep launching in efforts to replace Bitcoin but its never going to be replaced.
Bitcoin is like the Original Vampire. It creates its spawn but they are affected by what Bitcoin does. You can’t replace that which gives you life. You can only become an extension of it, or die. Overall, I believe Bitcoin is here to stay, regardless of the forks that spawn after it. Transaction times and other factors are nice, but its like that classic car you learned to drive in, you could dump it for a new Mercedes, or you can keep your old car and the Mercedes and drive them both when you want to. You’re heart will always be with your first…
9“Just saving Bitcoin will be rewarded”
By Mark Norton – Mark is blog author of BitcoinWarrior, the source for the latest Bitcoin News, Education and Strategy all aimed to make the best use of bitcoins.
As a long-time Bitcoin enthusiast and promoter, it will surprise no one that my answer to tis question would be ‘yes.’ That being said, I have always gone for the soft sell, trying to persuade people of the value of Bitcoin rather than trying to pressure them into getting some now. Get in when you’re ready, not before, and only to the degree that they’re comfortable.
First and foremost, the crash of 2008 threw into sharp relief how fragile and corrupt our current system of money is. The game is rigged in the favor of millionaires and billionaires, they can crash the economy, get richer in the process, and not one of them will go to jail. Meanwhile, wealth inequality grows apace. What’s more, as we become increasingly a cashless society, those same people are approaching the ability to know everything about us – how much we make and what we buy, because of our absolute reliance on banks. And they charge us for the privilege of stealing our privacy.
The solution is a decentralized system of money that works independently of banks and governments. Trust in the currency will come from the fact that all its rules are known and can only be changed by broad consensus (something we’ve been seeing play out recently in the scaling debates). This currency, Bitcoin, can be privately held and sent anytime, anywhere in the world without the intermediation (and fees) of banks. Further, governments and banks will no longer be able to freeze or confiscate your money just because they want to.
Second is that currently Bitcoin is still merely at the beginning of its story. At around 6,000 dollars per bitcoin at the time of writing, it would need to rise at least 10x before it can really fulfil its promise of being a counterweight to government/bank controlled fiat money. And after that, the currency is intentionally designed to be deflationary, which means that just saving it will be rewarded.
Bitcoin is high-risk in that no one really knows if it can fulfil its potential – but it has also proven itself to be incredibly resilient. I think that everyone should have a bitcoin, or even a fraction of a bitcoin, squirrelled away. It may turn out to be worth nothing, but the way things are going, it might just be the thing that carries you through your later years.
10“We’ve great success with Bitcoin but the music is about to stop”
By Paul Koger – Paul Koger is head trader and founder of Foxy Trades LLC where he shares his very best trading strategies. As part-time trader, Paul specialises in swing trading.
Me and some of the traders in our company trade bitcoin and ethereum. We’ve have great success with them owing to the massive liquidity and hype that is surrounding the crypto currencies. However in regards to investing into bitcoin, I strongly believe that it’s a game of musical chairs and the music is about to stop.
11“There will be only one universal digital currency”
By Yosef Kerendian – Yosef is a Finance and Management Senior at Yeshiva University and President of the CryptoCurrency Club. He wants to become a research and data analyst at a crypto fund.
Yes. Paper money will fade and die. Additionally, there will be only one universal crypto currency. Maybe that would be Bitcoin. Maybe it’ll be something else. But here’s how the money system will work a decade from now:
There will be only one universal digital currency, say Bitcoin. Every person will use Bitcoin to make every day purchases. Buyers will pay with Bitcoin. Sellers will get paid in Bitcoin. When you travel and/or do businesses abroad, you won’t need to convert your local currency for a foreign one. Take for example, you travel to Israel for winter break.
There won’t be any need to stop at your local bank or find a money exchanger in Tel Aviv to convert USD to ILS and vice versa on your way back. Say you travel to Hong Kong, invest in a British start-up, donate money to a soup kitchen in Africa, lend money to a friend in America, and work out of Israel, Bitcoin (USDD; United States Digital Dollar?) will be the one currency used and accepted everywhere, by everyone, at all times. Wherever you go, anyone you meet will accept Bitcoin and its universal price.
12“Then again—if you don’t buy, you might laugh at all of us who did.”
By Admir Tulic – Admir Tulic is Cryptocurrency Educator and Co-Founder at CaptainAltcoin.com. Aside of crypto he is a Pharmacist with digital marketing expertise.
There’s a common saying when it comes to investing in general: “The best time to plant a tree was 20 years ago; the second best time is today”
Same thing applies. The best time should’ve been 2009-2013. You get in now and you are still an early adopter. Point is, if you’re serious about investing and the long-term, buy now. Don’t wait any longer.
It’s never fun to buy at the all-time high but it’s even worse to miss out on 1000% profits because you didn’t pull the trigger. Then again—if you don’t buy, you might laugh at all of us who did. And you will save money. It is a high risk-high reward field.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of InvestaWeb.