Last year, I started investing in cryptocurrency. Nothing big to start. I just took about $500 of my savings and bought some Bitcoin. But I began saving more of my money from my job and after accounting for all my expenses, I had nearly $1,000 left over each month. Normally I would put that into savings, but beginning last Winter, I started investing in Cryptocurrency.
My sister thinks I’m crazy. She says investing in cryptocurrency isn’t investing at all. She thinks it’s no different than gambling. I think she’s wrong, but she has a few points.
One is that if I lose money, then I lose money. That’s true. I can’t expect to make a huge profit on my investment. If I want to be profitable, I’ll need to do a lot of buying and selling. Buying and holding would be the best choice for me, but if I do that, I risk losing money on a long-term basis.
But let’s assume for a moment that I do lose money. If I invest $5,000 in cryptocurrency, I could lose half of that, which is $2,500. Is it a lot? Yes. But devastating? No. I’d still have $2,500 left over to invest. So long as I don’t lose too much, I should still make a profit on my investment.
The other thing my sister said is that there’s no guarantee that cryptocurrency will be around in 20 years. In fact, there is every reason to believe it won’t be.
Cryptocurrency is new. It was created only 10 years ago. It’s based on technology that was not widely used until very recently. It’s possible that cryptocurrency will disappear in the next decade. It’s even possible that it could happen within the next five years.
But that’s okay with me. Cryptocurrency might disappear, but I really don’t think it will. Now some cryptocurrency projects might disappear, and the value of the big coins may drop dramatically, but cryptocurrency will still be around for sure.
As a matter of fact, if you look at the price of Bitcoin right now, you can see that the price of Bitcoin has gone up substantially in the past year. You can see it in the graph on CoinMarketCap.com.
I don’t have any proof of this, but I believe that one of the reasons for the recent increase in price is due to people like me, people who have invested in cryptocurrency. My theory is that people are investing in cryptocurrency because they think that cryptocurrency is going to increase in value and they’re going to make a lot of money if they buy now. That’s what’s causing the price of cryptocurrency to go up.
If I’m right about this, then this increase in price is not a bubble, at least not yet. If there was a bubble, the price of cryptocurrency would go down again, and we’d all be better off waiting until it comes down before we invest.
The point I’m trying to make is that we need to think carefully before investing in cryptocurrency, but that doesn’t mean we shouldn’t invest. Just be aware that the risk is higher than it is in other investments and you’ll have to be willing to accept that risk.
But that doesn’t make it gambling, no matter what my sister says. Sorry, Sis.