OK, I’ll confess. I have yet to make my first investment in bitcoin. Or any of the other 900 cryptos now in existence.
When I signed on with Port Phillip Publishing in November 2013, I had, of course, heard of this mysterious virtual currency. But I knew very little about it. And you should never invest in something you don’t understand.
That changed once I was introduced to tech guru Sam Volkering. He was on top of the crypto story from the get-go.
But any thoughts I had of investing were dashed by bitcoin’s rocketing performance. It soared from US$97.89 on 12 August 2013 to US$979.26 by 26 November. A gain of 900% in just over three months. That scared me off. And it turned out my fear was well founded.
Bitcoin slowly lost value, trailing all the way down to US$222.16 on 12 August 2016. And it wouldn’t crack US$1,000 until February this year. From there, as you know, it’s been on a tear once more.
At time of writing, one bitcoin is fetching US$3,468.22. That’s a gain of 248% this calendar year. Since we can’t turn the clock back to August last year and get in for US$222, you then have to ask, is this new rally sustainable?
Sam Volkering assures me it is. Though he does compare investing in any crypto to travelling through the ‘Wild West’.
Bitcoin may be the most widely adopted of the virtual currencies, but it’s still prone to some wild swings. While Sam is confident it will hit US$10,000 or more, it won’t be a smooth ride to the top.
Volatile or not, it appears the Australian government is finally beginning to catch on.
This headline comes from The Age this week, ‘Bipartisan push for the Reserve Bank to back Australian bitcoin’. The article continues:
‘Labor and Coalition senators have crossed the political divide to call on the Reserve Bank to embrace bitcoins as an official form of currency or risk the future competitiveness of Australia’s $145 billion a year financial services industry.
‘The push from Labor senator Sam Dastyari and Liberal senator Jane Hume comes after the digital currency soared to an all time high of $4070 [Australian] per bitcoin on Monday, up from less than 10¢ per coin in 2010.’
You can’t get much more mainstream than the Australian government. If the Labor and Coalition senators can see the light of day, bitcoin’s spectacular rise since March this year looks like it’s only the beginning.
And to give you an idea of just how fast bitcoin can rise, it’s currently trading for AU$4,390. That’s up from the AU$4,070 quoted by The Age in the above article, released only Tuesday morning.
Have You Taken the Leap?
So, have you taken the leap into bitcoin yet? How about Ethereum? Or any of the other 900 cryptos currently on the market?
And it’s really those newer, mostly unknown coins that I find the most intriguing. The ones trading at 10 cents or less today, which might be rivalling bitcoin in a few years. Those are the types of coins that could see a $1,000 investment turn into an Italian sports car…or leave you with empty pockets.
That’s an important point.
Unless you’re a crypto expert yourself, or have hours per day to study the virtual markets, any investment into these newly-emerging cryptos is akin to gambling. Now, I’ve got nothing against a little wagering. But I much prefer to have the odds stacked in my favour.
If you’re looking to improve your own odds before your next crypto investment, look no further.