The topic of bitcoin has come up all over the place. From family, friends, random acquaintances, co-workers. There’s that famous story about how in 1929 Joe Kennedy, the father of JFK, knew that the market would crash when he was getting stock tips from the shoe shine boy. The story goes on to say how Joe Kennedy sold his stock portfolio and avoided the stock market crash leading to the Great Depression. Well, that’s kind of how it feels now with Bitcoin being the talk of the town.
On the other hand, pundits have been predicting a stock market crash over and over again over the past decade.
2016 – “Countdown to the stock market crash of 2016!” (11.96% S&P return in 2016)
2014 – “98% chance of stock market crash in 2014!” (13.69% S&P return in 2014)
2012 – “Get ready for a stock market collapse!” – (16.00% S&P return in 2012)
Trump win – “Trump win will lead to market crash!” (20+% S&P return so far in 2017)
And this guy wrote a book about huge returns for 2008! Check out the reviews. They’re pretty funny.
So in other words, nobody knows anything about the future, much less when/if Bitcoin will crash.
By now, almost everyone has at least heard of bitcoin. But what compelled me to finally get involved, even with all the skepticism out there?
- FOMO. Fear of missing out. Worst case scenario, I lose my investment (which at this point is a couple thousand dollars). Best case scenario, my investment rises 2,000%+ in 2018. And entirely possible, it goes up a few percent and matches the stock market. I see bitcoin as just a small percentage of my entire investment portfolio. Most of my money is in stable, boring index funds. So I can afford to put a small portion in a wildly, high-risk, speculative investment.
- The technology is fascinating. This is actually what really sucked me in. The idea of a decentralized, pseudo-anonymous currency, immune from the influence of governments and institutions makes a lot of sense. It used to be that only drug lords and criminals would care about anonymity, but in these days of Equifax leaks, everyone should care about protecting their private data. I’m not going to pretend I know everything (or even 5%) about how blockchain works, but there is huge potential, basically anything that involves transmitting, securing and verifying data. (Is there any company that doesn’t need that?). There are a ton of Youtube videos explaining the technology. A lot of them don’t get into the nitty gritty that my brain needs. This one was the best one. Whatever happens to bitcoin, blockchain, the technology behind bitcoin, is here to stay.
- Low barrier to entry. If investing in bitcoin involved starting a company or finding a venture capital firm, or even installing and running a coin mining program on my computer, then I’d still be on the sidelines. It cost me a few dollars in fees and about 10 minutes to get started at Coinbase.
So there you have it. Come take the plunge!