Ever wonder how it feels like to become a bitcoin millionaire? Apparently, people who took the risk approximately 5 years ago are now enjoying the benefits of their investment in an unexpected way.
Just to give you a preview, the worth of digital coins reached an all-time record of nearly $20,000 in December 2017. Less than a year after, it’s value has dropped to about $6,400, based on digital-currency site CoinDesk, whose Bitcoin Price Index tracks costs from several key exchanges, which is understandable considering its fluctuating nature.
Even though bitcoin is worth a lot less now than it was at its peak, in case you invested $1,000 five years ago, you would still have made a huge profit. However, volatility is pretty common for cryptocurrencies. Ethereum, after valued near $1,300, based on digital-currency tracker coinmarketcap, is now hovering around $200. Digital monies XRP and Litecoin have seen similar declines.
That is part of the reason experienced investors suggest to use caution when it comes to crypto. Warren Buffett, fondly called the Oracle of Omaha, has warned that bitcoin’s worth is not stable. Legendary investor and Vanguard founder Jack Bogle, at a Council on Foreign Relations occasion, told the crowd that we should avoid bitcoin like a plague. As you can see, traditional investors are having quite a hard time accepting digital currency’s role into our society’s future.
“Bitcoin doesn’t have an underlying rate of return,” according to Bogle. “You know bonds are an interesting voucher, stocks have earnings and dividends, [and] gold has nothing. There’s nothing to support bitcoin, except the hope you will sell it to somebody for more than you paid for.”
More recently, at a hearing in Capitol Hill, international economist, and New York University professor Nouriel Roubini said, “Crypto is the mother & father of all scams and bubbles.” He compared them to “swindlers” who tapped to shareholders’ fear of missing out and encourage them to get a ride with crappy assets that will go crashing in a matter of months like you haven’t seen in any history of financial bubbles.
If you are considering investing, you have to take into consideration the advice of the best-selling author, Tony Robbins. In his book, Robbins compares a particular amount of cash to risky ventures, but he does not rely on them solely in order to survive. In everything you choose to invest, always remember that there’s a risk, and it’s always up to you how much risk you could tolerate.