Should I Invest In Bitcoin?
With the value of Bitcoin soaring higher and higher, and many respected names in the financial industry setting price targets many times higher... it's understandable that you may be wondering; "Should I invest in Bitcoin? Or some other cryptocurrency?"
First let me provide some education on what Cryptocurrencies are and then we'll talk about whether you should "invest".
What is Bitcoin?
Cryptocurrencies, like Bitcoin, Ethereum, and Dogecoin are a form of digital asset based on a network that is distributed across a large number of computers. This decentralized structure allows them to exist outside the control of governments and central authorities.
The word “cryptocurrency” is derived from the encryption techniques which are used to secure the network, called Blockchains, which are organizational methods for ensuring the integrity of transactional data, and an essential component of many cryptocurrencies.
Many experts believe that blockchain and related technology will disrupt many industries, including finance and law, but they face criticism for a number of reasons, including their use for illegal activities, exchange rate volatility, and vulnerabilities of the infrastructure underlying them. However, they also have been praised for their portability, divisibility, inflation resistance, and transparency. (source)
Should I invest in cryptocurrency?
When deciding what investments to hold within your portfolio, the first thing you should decide is what you are saving and investing for... A down payment on a house? retirement? fun? Then decide how long you plan to keep the money in the investment account before withdrawing it... Potentially less than a year for emergencies? In 2-5 years for a major purchase, like a house? Or a long time from now (5+ years) in say, retirement?
Then decide whether or not you believe it is wise to gamble... Yep. This is important because gambling and speculative investing are VERY similar.
Speculating is defined as: "decisions engaged in, expressing, or based on conjecture rather than knowledge." So basically you are guessing what the future will be and placing a wager based on how confident you feel in your intuition... That definition fits both gambling and investing in Bitcoin (or any other currency). You (and everyone else) have no guarantee of what will happen, so you are making decisions based on what MAY happen, not what WILL happen.
So if investing in cryptocurrencies is like gambling... let me ask you, "would you gamble with your retirement savings? Would you gamble with the money you have set aside for a down payment?"
If the answer is "no", then you should not bet on Bitcoin.
It would be much wiser to invest your money in things that have proven to provide reliable returns over decades of bad economies, government administration changes, and the like. Something where you'll sleep comfortably at night knowing your money will be okay.