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.
Reasons aplenty
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.
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.
with clients all over Australia and around the world. Andrew has over 30 year’s experience in the finance industry and has assisted clients to secure over $2 Billion in mortgage lending over his time. Intuitive Finance deals with all aspects of lending from helping first homebuyers, someone wanting to upgrade their home or starting out and experienced investors looking to secure that next investment property, we can assist with all those requirements. We also specialise in working with self-employed clients and getting them the best outcomes, along with Commercial and Asset finance solutions. Intuitive Finance is highly regarded in the industry and has been recognised as a national winner of the MFAA customer service award and also one of the finance industry’s top mortgage employers. Our brokers also feature regularly in the Top 100 mortgage brokers list in Australia.
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4 Comments. Leave new
give the full story what was bitcoin in january last year around $1000 so the fact it as gone up around 1000% in a year is not good but it was up 2000% in december, yes it volatile but why not give the full story not the little tidbit that suits your story. Since you have no idea about cryptos dont talk about them stick to what you do know about property and loans
Thanks for your feedback Craig. In an “opinion” piece the tidbits that I write about are just that, opinions. What i do and don’t know about Cryptos is irrelevant, my article merely relates to why I won’t be investing in them.
So tell me, what’s your opinion?
Andrew, it would be interesting to hear your thoughts on Ethereum. This cryptocurrency bucked the trend and has been growing whilst the other top 10 cryptocurrencies have been crashing through the floor.
Thanks Val,
I am very reliably informed that Ethereum has some very sound technology behind it and Yes, it is certainly bucking the trend.