There’s so much hype these days about bitcoin and many different (1,300) crypto currencies are going on the bandwagon too. Governments are supposedly coming up with the rules and regulations for trading them too. Likely that the US stock markets will be first.
Doesn’t this go against the whole concept of bitcoin? The whole reason is to exclude the current monetary system in existence and that includes governments, right?
There have already been crimes committed in the short existence of bitcoin and people have gone to jail accused of using bitcoin to sell drugs and use it for money laundering. Interesting then that nobody has gone to jail for the 2008 global financial crash and banks receive tiny fines for their banks being used to fund terrorists. There are suggestions of a two-tier system being created.
Bitcoin is not a physical currency, like we know today and many commentators suggest that it will never be a mainstream currency either.
So why has the price gone up so significantly over the past year (2017)?
For me it is the same reason the stock market goes up and down, ‘emotion’.
When investors and the public influenced by investors start discussing a way of making lots of money, albeit in a currency nobody can actually touch and hold, everyone’s emotional brain engages in that direction.
As soon as something rises so fast it has the potential to drop even faster. Remember the .com boom and bust?
Warren Buffet, probably the world’s most successful investor has suggested to stay away from it, but what happens when other famous investors do go after Bitcoin? Does Joe Public follow too? Trouble is experienced investors do not have their money in one basket and that means they spread their risk. Joe Public will likely take their savings and invest it into bitcoin with the potential of losing all their money, invested in one non-mainstream currency.
Or worse still they will bet on the currency going up and down, which will likely cause stress and fear.
As humans we are consumed by greed and it is true that greed for money and stuff runs through everyone’s veins.
My philosophy is simple. Unless you are happy to lose all your investment, like gambling then invest, if not, stay away.
More reading:
https://www.washingtonpost.com/news/wonk/wp/2018/01/08/bitcoin-is-the-new-middle-ages