Bitcoin - to invest or not?

[Dimo]

I keep hearing about this, only today a piece on the radio. However, it neglected to advise on investing and there was a hint that the bubble was about to burst. Anyone here got any (practical) advice re investing, and exactly how to, or is it best avoided?

 

[Mark T Jones]

The bubble will burst. (The only people who dispute that are those with a vested interest in selling bitcoin).

The question is whether it will happen in 6 months or 2 years.

My advice would be

1. Avoid at all costs MLMs or schemes selling packages and ‘guaranteeing returns.
2. Only invest what you can afgord to lose
3. Have s clear exit point and stick to it. Under no circumstances wait for the top of the market
4. Buy with your head, not the hype

 

[MBE2017]

Good advice above, stick to it.

Truth is no one knows when Bitcoin will burst its bubble, but nothing can keep increasing in value at its current rate forever, so expect many small and large corrections along the way, swings of 10 to 30% or even higher in a day are possible, so only risk what you can truly lose.

At the moment many people are making big gains, particularly in the last year, I first looked at Bitcoin approx 3 years ago. It was just as risky then as it is today, it will only be worth anything until people realise it is worthless.

One lad I know is in a network mlm system selling bitcoin packages, he markets the returns as 1% daily, he tries to come across as knowledgeable, but he is an idiot. He is still making money, but he is the type to let it all run until the end, and will probably end up with nothing.

 

[owas]

If you do, I would suggest open an account with coinbase and deposit your funds to your pound account here. Also download the app, when you see a dip in bitcoin or ETH its quite simple on their site to make a qucik transaction (bare in mind the fees also). They also have a good dashboard and up to date current value charts. Of course dont invest expecting to make thousands, and spread your funds across all the ****** they offer. I have done this a few weeks back, and I have tripped my investment. This is not without risk though, as ****** currency is so volatile and with not being regulated if the site is hacked or I make an error I wont get it back.

Another site I have just started looking at is bittrex, which I think is an exchange for most ****** currencies, although I haven't fully worked out the buy and sell process yet. Some others like ripple and monero are ones to watch.

 

[deanpunchard]

At the moment the raise is down to the fact people like yourself are simply buying it. Once the buyers become less and less, the bubble will burst.

I'm really dubious about the sheer number of sites, news articles, etc around "bitcoin millionaires" and such. Are these becoming more frequent because they feel the burst is coming soon, and they have vested interest in Bitcoin, so it's in their interest to keep people investing?

 

[Bainzee]

Good points made above.

I am a payments consultant and have been following bitcoin and more so the blockchain technology for a good number of years now but certainly not an expert as in my opinion the true experts are the tech geeks that understand cryptography. The bubble will burst at some time with bitcoin, as a matter of fact, bitcoin lost about £2k in value over the last few days but shot right back up again. Amazon's bubble burst many years and then it had the strength to pick itself back up in the times of recession and look at where it is now and the same will most likely happen with Bitcoin. some so called experts say that one single bitcoin will reach the $500k or even $1m mark at some point in the future but nobody really knows this for sure. From my knowledge and experience, i would certainly say that cryptocurrency is here to stay given the many advantages it provides and Bitcoin will not be the main currency as it has many flaws so therefore another currency may do as good if not better than bitcoin but very early days yet.

Key is to do research and once you feel confident and understand the technology and the benefits it will provide us then certainly invest an amount that you're comfortable with

 

[Pish_Pash]

We're at the 1920s shoeshine boy stage of the bubble ...where everyone is being told "buy bitcoin" ...I think it may still have much further to run, but frankly, it's about as hairy an 'investment' as you can get. It would only take Governments of the world to gt their heads together & say"owning ****** curreny is to be made a criminal offence wef Feb 1 2018 (& they may well, as it takes 'control' out of their hands)

 

[Awinner2]

No axe to grind either way but this article highlights the dangers?

http://www.dailymail.co.uk/news/art...s-using-bitcoin-cashpoints-launder-money.html

 

[wevet]

Gold is arbitrary as a store of value so is a cryptocurrency. There is one difference gold is identifiable and any replication such as "fool's gold" is no accepted as being valuable. If there wer only one cryptocurrency i.e. Bitcoin we could say collectively let us adopt that as a means of storing value. The difference is there are now dozens of cryptocurrencies. Is Bitcoin "gold" and the others "fools gold"?

When Bitcoin was launched it had a value of $0.008. The founder hung onto 1 million at a face value then of $8,000 now with a value of $10 billion.

So, when people ask, in whose interests is it to manipulate the "value" and drive the price upwards there lies your answer. Those who were around at the inception have huge holdings, the exchanges earning commissions on trading all are driving the price up.

 

[Alan]

It would only take Governments of the world to gt their heads together

Only - only - well that isn't likely to happen in out lifetimes.

 

[Kev2017]

The Bitcoin is something I am dabbling in (I'm a newbie to it!). I believe that the bubble will burst. An issue that we face in the UK is that bitcoin fluctuates in value and is sold in US$. We have the bitcoin exchange rate and the $ to £ exchange rate to contend with. The price has varied in the last six weeks leaving a difference of £2000. If I had invested six weeks ago, I would be over the moon, but it isn't always as simple as that.

I am putting it out there, I think there's mileage in it yet. I predict, in my small time dabbling, that we will see it rise to around £9,300 then fall dramatically back to around £4,800. After currency conversion. I have a vested interest and a capital interest so I will cash out when the exchange hits £9,000, that's my plan. I started buying at £6,282.

 

[Pish_Pash]

Only - only - well that isn't likely to happen in out lifetimes.

It wouldn't take all Governments getting their heads together to trash it - just the main governments - believe me, Governments aren't going to take this lightly & sit twiddling their thumbs on the sidelines - expect some seriously bad news flow to start kicking in once they do act.

 

[Brian Mcculloch Glasgow]

Bitcoin is a digital currency that is just starting a journey of acceptance around the world. I have used bitcoin to buy packages equivalent to 50€ each. They pay back 1% a day for 140 working days meaning you make 40% interest in 7mths. You can invest your 1% and get compound interest. It is great to see your purchase multiplying. Everything is a risk in life but at present this is paying off. Happy days

 

[Mark T Jones]

Bitcoin is a digital currency that is just starting a journey of acceptance around the world. I have used bitcoin to buy packages equivalent to 50€ each. They pay back 1% a day for 140 working days meaning you make 40% interest in 7mths. You can invest your 1% and get compound interest. It is great to see your purchase multiplying. Everything is a risk in life but at present this is paying off. Happy days

This is precisely the kind of scheme you should avoid. It’s a pyramid which will collapse long before the bitcoin bubble bursts.

 

[Brian Mcculloch Glasgow]

This is precisely the kind of scheme you should avoid. It’s a pyramid which will collapse long before the bitcoin bubble bursts.

Can you please explain in detail where am I going wrong.

 

[MBE2017]

Can you please explain in detail where am I going wrong.

At the moment you probably are not, only time will tell what will happen to Bitcoin. If you are happy keep investing, but sooner or later the huge increases will stop.

Investing in your network marketing plan is the easy bit, how easy it will be to cash out in an emergency etc might be more problematic, but enjoy the ride whilst it lasts.

 

[Mark T Jones]

Can you please explain in detail where am I going wrong.

A quick google search of USI will reveal quite a lot

Long and short it’s almost definitely a blatant pyramid

There it no record of USI trading bitcoin (all transactions are recorded)

Your guarantee is almost certainly funded by newcomer fees, not from trading profits

In a nutshell, if you want to invest in ****** the do (hopefully mindful of the risks), there really is no need to go through a third party ‘scheme’, particularly one that makes outlandish promises

 

[JoeBetter]

Have a listen to the Invest Like a Boss podcast on Bitcoin, it has some good info on it.

ILAB 78 – Bitcoin 101, How to Invest In Cryptocurrency

 

[Alexander Sadlier]

I'd say you were mad to invest in Bitcoin. It's speculation, you are essentially gambling. Sure it might go up, but it might go down.
Avoid the hassle

 

[lillie421]

I definitely think it is worth investing in bitcoin, the amount it goes up each month is unreal!

 

[Mark T Jones]

unreal!

Precisely!

 

[Chris Ashdown]

If people want to gamble on the Horses or dogs its' seen as ok, ok to gamble on stocks and shares or invest in a new company still ok
Yet to gamble on bitcoin then everyone see's it as a problem, but nobody knows how long it will climb and a good chance it may still give you a good return if you can afford to loose it

 

[Mark T Jones]

If people want to gamble on the Horses or dogs its' seen as ok, ok to gamble on stocks and shares or invest in a new company still ok
Yet to gamble on bitcoin then everyone see's it as a problem, but nobody knows how long it will climb and a good chance it may still give you a good return if you can afford to loose it

If they recognise it as a gamble that’s great

Unfortunately there is currently a high degree of mis selliing and some very naive buying in this sector at the moment

 

[pelparc]

If your going to buy make sure you have a way to sell it quickly for a agreed price. A lot of the exchanges just display your sale request and wait for someone to buy it at that price. If no one is buying your stuck.

 

[Chris Ashdown]

If they recognise it as a gamble that’s great

Unfortunately there is currently a high degree of mis selliing and some very naive buying in this sector at the moment

That sounds like you are talking about serious investors with years of experience like the banks 12 or so years ago

Why do we think others are stupid yet we are wise

I am not for one moment suggesting you invest in anything, but don't call a selected bunch stupid if that's what they want to do

 

[Gordon - Commercial Finance]

Buy with your head, not the hype

If everyone did that, no one would buy bitcoin.

Its a decent gamble, and its fine for people to crack on if they consider it that. The problem is that people are treating it like its a currency, when it absolutely is not. This then leads to people treating it like an investment, which it absolutely is not either.

I had a thought yesterday - perhaps the burst of the bubble will come when the price of a single unit is so high that the number of people who can buy decreases, and it has a liquidity crisis. As far as I know there's no plan written in to the technology which would allow a stock split or similar to reduce the price without killing the market cap and making it more liquid.
The number of pyramid marketing and Ponzi schemes springing up and the ferocious increase in PR and advertising of the "millionaire bitcoin investors" is an absolute cert indicator that this is a bubble.

Its not a currency, its not an investment.
Gamble at your leisure.

 

[owas]

A simple method thats working not to bad for me at the min, first of all I only use profit from gains I have made not my own cash. Once I double up, take out my first half so if that particular ****** crashes I have only lost the gain and not the investment, think about how you keep them, for instance if you want a qucik buy and sell dont vault them, if you want to keep them more secure from hacks etc keep them in a vault.
I dont gamble on sports etc just the odd lotto ticket here and there, but I do see this as more as gambling. I would however like to see ****** / block chain become the mainstream for payments in the future and cut out the likes of governments and banks control and quicker cheaper payments. We are certainly going to offer this as a payment option when we next revamp the site.

 

[Chris34]

One of the other ****** currencies could certainly end up being a currency. Bitcoin can't do that as it's limited.

In terms of investing into the cryptocurrencies, it seems pretty obvious to me. Bitcoin is the leader and is driving the headlines, this generates all the mainstream interest, this then filters down to the cheaper cryptocurrencies with people buying into them thinking they will be the next Bitcoin.

All you need to do is look at the technology behind it and work out whether it has got a chance. It's just like buying stocks and shares, a share price only goes up if everybody else buys into it, it's got nothing to do with profits. So you have to predict what the general buying trend is.

At the moment I'd say leave Bitcoin, but invest in Ether and Litecoin. Ether will easily hit $1,500 while there is people interested in the whole cryptomarket and Litecoin is definitely worth a dabble. It's not that Bitcoin is about to go down but percentage wise the gains will not be anything like the gains that you could get from litecoin and Ether.

It is worth it though. The amount of mainstream interest is mega at the moment so I'd give a 75% chance of them going up and a 25% chance of them going down. Just spread your eggs over many baskets and it's hard to see how you can lose right now. But definitely have a strategy to cash out.

I think there probably is a lot of investors who cash out and then use their profits to re-invest in the next cheaper ones. So the cheaper ones have got more potential for profits in my opinion.


Chris.

 

[Chris34]

And just for reference the prices at the moment are as follows:

Ethereum = $687
Bitcoin = $19,508
Litecoin = $299.35

 

[Alan]

perhaps the burst of the bubble will come when the price of a single unit is so high that the number of people who can buy decreases,

I think you misunderstand, the ****** currencies can be bought and sold in fractions, very very tiny fractions. Bit coin's smallest fraction is one hundredth of a millionth, so when bit coin reaches $1,000,000 you can still trade in the smallest amount of US currency, i.e. 1 cent. For a Bit Coin to be unusable for every day purchases, say 25p units - that sets a theorectical maximum for BitCoin at £25,000,000 _ I don't see BTC reaching that price level in the next few years

The maximum number of bit coins in existence is something like 20million

So the usability will drop when the total capitalisation on BTC is some £50,000,000,000,000

So that is some $75 trillion dollars - that is quite big, 5 times the US economies GDP.

So your theory about the bubble bursting when people can't afford buy BTC, would mean the bubble will only burst when practically the whole worlds economy is held in BTC!

 

[Mark T Jones]

The bubble will burst when:

• The supply of gullible idiots runs out (in a global market they are in plentiful supply)
• The rampant mis selling of ****** investments becomes regulated
• One of the bigger ponzis collapses.

 

[Gordon - Commercial Finance]

@Alan I see. I suppose the burst will come from somewhere else.

I like the idea above from @Mark T Jones about regulation.

 

[pelparc]

Putting aside the bubble is about to burst issue, the biggest problem i see is selling. From a quick look on websites claiming to sell Bitcoins etc. they either just enable you to list your sale at a price you choose and then wait for someone to buy, which if panic selling happens you will be stuffed. Or there are some that fix a price to buy your Bitcoins and pay you instantly however the buy and sell spread is massive. Who do you (if you have any) plan to sell with?

 

[Alan]

You don't have to sell them through exchanges, you can buy stuff with them too.

There are literally hundreds of UK retailers that accept ****** currencies.

It is true the 'professional' sites use an order driven market and that there are retail brokers with larger spreads. This is the same in all financial products.

Getting your head around these digital commodities is pretty hard. It is difficult for me with a background in maths and economics and 40 years in technology.

I just wish I had less skeptism 4 years ago .....

 

[pelparc]

It is true the 'professional' sites use an order driven market and that there are retail brokers with larger spreads. This is the same in all financial products.

I don't think i have ever come across any spreads that large normally its about 0.5% (+0.3% transaction and a fixed £10 commission) not 10%

 

[Gordon - Commercial Finance]

You don't have to sell them through exchanges, you can buy stuff with them too.

There are literally hundreds of UK retailers that accept ****** currencies.

Not strictly true. If it could be accepted as payment it would almost qualify as an actual currency. True that retailers will trade with you on ****** but they're not really taking them as a method of payment. If it was a legitimate payment method, they would be keeping the Bitcoin and paying their staff and tax with it. Instead, they instantly convert Bitcoin to USD or GBP. Really they're not taking it as payment, they're just trading with you and giving you a good exchange rate.

Your point still stands of course. And its a good one.

 

[Alan]

I don't think i have ever come across any spreads that large normally its about 0.5% (+0.3% transaction and a fixed £10 commission) not 10%

Really - just take a look at the retail spreads - use the post office buy £100 worth of USD and sell it back ... you will find the spread is some 14%!

 

[Alan]

Not strictly true. If it could be accepted as payment it would almost qualify as an actual currency. True that retailers will trade with you on ****** but they're not really taking them as a method of payment. If it was a legitimate payment method, they would be keeping the Bitcoin and paying their staff and tax with it. Instead, they instantly convert Bitcoin to USD or GBP. Really they're not taking it as payment, they're just trading with you and giving you a good exchange rate.

Using your logic then USD isn't really a currency, as I take payment ( or should I say 'trade' ) for my plugin in USD and a third party converts USD to GBP and I pay myself & account in GBP

 

[pelparc]

Really - just take a look at the retail spreads - use the post office buy £100 worth of USD and sell it back ... you will find the spread is some 14%!

I am not using a retail branch to trade, i am using a "trader" when buying and selling currency with a real trader the spread is about 1% from memory, i normally buy and sell shares not currency.
Really i was just interested if anyone was actually selling at good rates and who with, which would then enable them to take advantage of the fluctuations.

 

[The Byre]

The bubble will burst when:

• The supply of gullible idiots runs out

The supply of idiots is being added to every day.

I am often asked if the Britcoin is a real currency and if one could lose money by holding Britcoins.

The Britcoin (or Pound, as it is sometimes called) is unstable and unpredictable and is often used by speculators in shady deals and money laundering operations and tax avoidance schemes. It is therefore best avoided by ordinary consumers and recently it was talked up to dizzy heights, only to crash spectacularly, incurring huge losses for investors.

At present, the Britcoin remains very fragile and I recommend that ordinary punters stick to better regulated and less volatile currencies, such as deposit bottles, scrap metal and Google credits.