I’ve been trying to think of an opening that will grab your attention and just want you to keep reading. So I did my best YouTuber Andrei Jikh impression and did the most amazing magic trick. You may not have seen it, but trust me, it was awesome. Now that I have your attention, let’s talk about Bitcoin.
Bitcoin is the new hot topic lately, becoming a new fad that everyone is trying to join. Cryptocurrency is becoming more and more appealing now that the value of our dollar is in danger. The current economic climate has put hesitation in our future and the stability of our investments. Enter Bitcoin. It seems to be the fresh air many people have been searching for, a retreat from the everyday struggle of our volatile markets.
What Is Bitcoin?
What is Bitcoin? It’s a decentralized digital currency that doesn’t rely on any banks or a single person. It essentially runs on its own, uninfluenced by any outside forces. This is the main reason for everyone’s current pilgrimage into the cryptocurrency. Its security is on many levels higher than our current investments and the value is estimated to grow exponentially.
A mysterious person, Satoshi Nakamoto, who is either a single person or many people acting under a disguise, founded Bitcoin. I think we can all agree that just makes this more appealing.
It’s an investment that seems to be the future. Countless businesses and programs have begun adapting this technology, called blockchain, into other spaces for its security and technology. IBM, JPMorgan and Robinhood are among countless well-known companies that have implemented this technology. Many professionals found online have speculated the growth of Bitcoin will very soon reach unprecedented values, upward of $100,000!
That’s a big jump from its current $11,800 value. The problem that still persists is its volatility, jumping from all time lows to all times highs in the matter of days. Just two years ago, in 2018, we experienced a massive crash. Bitcoin was valued at close to $20,000 and within a year fell all the way to $3,200. That was a wild fall, resulting in so much money lost and their credibility. It’s taken quite some time to get back to where they are now.
Confidence in our US dollar is at an all time low now. Unemployment rates are unstable and we keep printing new money to help keep us afloat. We really have no idea what the future holds for our currency and us. With this distrust and uncertainty, people are now putting their hopes into crypto, knowing it is not driven by outside forces. In fact, during the scary crash in the market earlier this year, there was an 83% increase in signups, looking to take advantage of the new lower price.
In fact, this migration is keeping the prices continue to rise and as I mentioned before, many are expecting the prices to skyrocket to ridiculous prices. But unfortunately, this may be creating a bubble in the market space, which could result in the valuation going anywhere from $0 to over $100,000. It’s so uncertain, but a majority of the people is remaining confident, myself included.
Why I’m Trying To Ignore It
Despite its questionable future, I still truly believe it will jump to a ridiculous number that will change lives. But I’m trying not to think about it. It’s an investment that could ultimately put me closer to financial freedom, but I’m not there yet.
I am at the very end of my debt repayment plan and getting closer to putting a down payment on a house. My financial situation is tangled in building up my foundation in emergency funds and trying to get ahead for the first time in my life.
I have a plan I’m following that involved dividend growth investments, retirement funds and crowd funding, but Bitcoin is only secondary. I can’t put all my eggs in that basket when I’m not even at the starting line.
One important piece of advice I’ve heard over and over is to never chase the market. Bitcoin will most likely spike, but I can’t just throw some money together to invest tomorrow. I have to take my time and plan this out carefully. What if I put all the money I have saved towards Bitcoin and wait for it to go up. What if hits $0? What if it doesn’t spike for another few years? What if I could save a whole bunch of money on my car insurance just by switching to Geico?
Finance professionals always recommend allocating no more than 10% of your investment portfolio towards Bitcoin and other additional assets. This way you are better protected from loss. If that’s the case I could do that no problem. 10% of $0 is still $0!
Final Thoughts
I want nothing more than to start investing, but it’s not in my cards for the next few years. So I’m trying to look away for the time being and continue building up my investments for freedom. Bitcoin would be more like ‘funny money.’ Essentially money I can lose and not be hurt at all. It would have to be an amount I’d be able to invest and just go on with my life, without worrying about surviving it if fails.
Don’t talk to me for a few days if I miss the train and it jumps to a high value before I’m ready. But in the long run it’s the smart thing to do. I need to get my life together before I start down that path. Let’s get rid of debt first before I even utter the words investing.
But if you ARE ready, I would recommend doing your research and consider investing. I’m not a licensed professional, so never take my advice, but I would just say do your research and keep your options open.
So, do you think it will fail and come crashing down or is it something worth investing in?
