Why Now Is Not the Time to Dump Your Life Savings Into Bitcoin

With cryptocurrencies such as Bitcoin making astronomical leaps and bounds every day, in some cases doubling in as little as one month, many investors have begun piling larger and larger sums into said currencies as a speculative tool.

Stories are now beginning to circulate in the media of households piling their entire life savings into mining Bitcoin, investing in cryptocurrencies or trading the volatile digital coins as a means of growing said nest egg in an unconventional (yet quick) fashion.

While many analysts have cast doubt on the ability of cryptocurrencies such as Bitcoin to act as a true currency, due in part to the fact that very few retailers allow cryptocurrencies as means of exchange (one of the key functions currencies provide), the ability of cryptocurrencies to increase at such a rapid rate (and continue to increase despite numerous calls for a bubble) have resulted in the digital blockchain sequences of code to increase in value based almost entirely on slow-growing supply and out of this world demand.

As with many other disruptive technologies (the internet is a great example), getting in at the “latter stages of early” (i.e. in late 1999 in the case of the tech bubble) in the life cycle of said technological revolution can be disastrous.

While many of the proposed cryptocurrencies are likely to turn out to become winners over time, many will become the legion of small “.com” companies of the 90’s that flew high for a short period of time before meeting their maker.

The question investors should ask is not whether blockchain will revolutionize the world (the internet and other technologies have certainly done so), but rather, ask how much risk is involved in “trading” cryptocurrencies today.

Invest wisely, my friends.