Why I won’t be investing in bitcoin!
When I wrote about bitcoin just before Christmas, its price was sitting around USD$19,000.
Today, about three weeks later, it’s sitting about USD $14,000.
That’s a drop of about 26 per cent – in just three weeks!!
I don’t know about you, but if my property price dropped by that much over three years I would be freaking out, let alone over just three weeks.
And that’s the thing with bitcoin and other cryptocurrencies, they are reactionary to the slightest market unease.
The latest fluctuation was because website CoinMarketCap removed prices from South Korean exchanges in its calculations of digital currency rates without any warning, resulting in a steep drop in all virtual coins they track.
Conversely, property prices are strong and stable and very rarely suffer from such big peaks or troughs over the short or even long-term.
Who’s buying bitcoin?
I know that some investors like the ride of investing in bitcoin or on the share market generally.
They enjoy watching the price fluctuations and trying to buy low and sell high.
Some people are very good at it.
Most humans, however, should stick to investments that are less emotional so they can be sure they’re making rational long-term decisions and not irrational ones motivated by fear or greed.
And while I never had any intention of investing in bitcoin, some new research has reaffirmed my commitment to stay away from cryptocurrencies altogether.
And that’s because I’m not a criminal.
Here’s what I mean:
A forensic analysis conducted by the University of Technology Sydney has found bitcoin to be the “PayPal of the dark web”.
Research from UTS Business School found that nearly half (around 43 to 49 per cent) of bitcoin transactions are related to buying and selling illegal goods such as drugs, weapons, and pirated software.
The research tracked illegal bitcoin use across the globe from 2009 to 2017, which also found that one-third (32 to 34 per cent) of bitcoin users were using the cryptocurrency for illegal activities, with half of all bitcoin transactions used for trading illegal goods.
Approximately a quarter (20 to 28 per cent) of the total dollar value of bitcoin transactions was of an illegal nature.
So, if the possibility of losing about 30 per cent of investment within a matter of days isn’t enough, this latest research offers another reason to stay away from bitcoin if you ask me.
I don’t know about you, but I’m a law-abiding citizen who would never consider investing in anything that is also popular with criminals.
While I have a desire to be financially independent and financially free, that desire doesn’t extend to investing in a product that helps criminals break the law.
On top of that, other cryptocurrencies like Bitcoin Cash are under the spotlight for potential insider trading.
It does really seem like one bad news story after another at the moment when it comes to bitcoin.
There are its wild price fluctuations, its use by criminals, and a variety of competitor cryptocurrencies sprouting up almost daily.
Plus, to top it all off, most people have no idea at all what it is or why it’s growing or falling in price apart from plain old greed or fear.
And that is the number one reason why I’d never invest in bitcoin.
Discuss your specific needs & formulate the right strategy for you. Get in touch to organise your complementary 60min session today!
The information provided in this article is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs.
Latest posts by Andrew Mirams (see all)
- The stages of a construction project: completion and realisation - September 10, 2019
- Housing Market Forecasts 2019-2022 - September 10, 2019
- The living expenses debate And Why throwing ASIC’s court case against Westpac out just makes sense - September 6, 2019