Why is RBI spoiling the party for the 3rd time? They seem to be so fearful that they have again issued a warning on 5th Dec 2017, saying investor will be responsible for the loss. The regulator says no, returns are mouthwatering – and it’s my money… Should I invest in Bitcoins?
This is called Fear Of Missing Out… (FOMO)… When everyone is making money… why am deprived of something which seems so easy to do. May be it has risen insanely but Should I invest in Bitcoins?
(This article also contains many images for social media to highlight the impact on general society)
You search on the internet now, you will find many articles who will suggest you that you should invest a part of your portfolio in it. Some say 5% and some will say 25% and many say that Bitcoins are future.
Mostly these are paid post by the ventures who have started dealing in Bitcoins. These are like advertisement where these companies are paying the website or newspaper to publish it in form of article. Sorry… there is no code of conduct on such news items.
But the question still remains, should the euphoria influence you? Has the return frenzy changed the view?
Should I invest in Bitcoins NOW?
There is no doubt that Bitcoins are a bubble. The price increase in last 10 days has proved the point. It’s a bubble for the first time when ENTIRE WORLD IS PARTICIPATING. Earlier bubbles were country or region specifics. So fall will also be massive. Look at the chart of Bitcoin Price Rises.
It is a highly speculative item (I don’t want to call it asset because it seriously lacks properties of an asset class). The prices have crossed all barriers where the largest falls have already taken place in history.
The valuations have crossed IT bubble or Subprime crises of 2007. But it’s rising constantly where there is no inherent value or usage.
No one guarantees it no one regulates it.
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Bitcoin is a scam. And while blockchain technology has usage, it’s massively over-hyped in large part due to Bitcoin itself.
The future of money is digital. But it’s not Bitcoin…
You know what the irony is. At the same time, different prices are available.
In some cases, the differences amount to more than $2,000 in value. , particularly among some of the most voluminous exchanges.
For example, at the time of writing the price of bitcoin is trading above $18,259.00 at GDAX exchange. Whereas at Bitfinex, (another exchange) bitcoin is trading at $15,592.
At the same time, it’s a considerable amount less than the prevailing price on Bithumb, South Korea’s most voluminous exchange, and local exchanges Coinone and Korbit, all of which are seeing prices above $19,000.
Where will you trade your thousands or lakhs?
What do they tell you?
So-called Bitcoins experts & dealers provide 2 logics to justify this insane price rise.
First, they say that there is huge demand from Asian countries and demand vs supply is leading the price rise. So you think people in our country understand Bitcoin business that they are investing because their research says it’s a miraculous asset?
Even if many are investing, they are just doing because of price rise or the FOMO. This means they are increasing the size of a bubble.
The second reason they say that Japan and more countries are going to introduce Bitcoins in their derivative exchange. The US also plans to do it. Bitcoin seller says its like “someone is finally accepting them proving their legitimacy’.
So, it’s an acknowledgment that these are illegitimate trades. Also, derivative trading has always increased the volatility worldwide. So it is good or more homes are going to burn?
Warren Buffett and Nobel laureate Robert Shiller have called it a bubble. And, investing in a bubble is never a good idea. Even the 5% of your portfolio.
Risks in Bitcoins – What they hide from you?
The biggest risk is that no one understands the Bitcoin business because there is none. Price is just a figure that people bet world over, creating a misconception that it is an asset or a system running & producing something of value.
There are multiple risks like exchange risk, wallet companies defaulting risk or data theft. Details Here.
Is it safe to invest in bitcoins in India?
Why are Bitcoins sold in India? Bitcoin purchases and sales in India happen because no one has restricted it. They are allowed because they aren’t explicitly disallowed.
Will they get legitimate from the regulator? Very fewer chances as the regulator will never like to manage 2 currencies. It may regulate the companies dealing in Bitcoins. That’s all.
China banned bitcoin companies as it felt Ponzi schemes had started developing around it. So they acted. Similar can happen in India.
But the thrill remains as it is… Should I invest in Bitcoins?
Can I make money in Bitcoins?
Yes, you can…
100 Monkeys were given a pen and a pencil. And left alone… Many of them tore the paper, some played with it, some tried to scribble.. and one of them made an impression by writing an inverted V.
Will you call this monkey a genius or lucky? This is the difference between investing & speculation.
In investments, you can make similar returns by investing again and again, but in speculation, it is the luck that works. Investment means the genuine application of rules of investing. Speculation is just throw of a dice.
It is a real test now… For Your MIND
This is time to test your Behavioural Finance skills. Can you really suppress this Greed?
Deep down inside you are aware that it’s not a right product for you or anybody.
Can you handle not investing in Bitcoins? Perhaps this is the time you should answer it. What if If bitcoin goes to $30,000 over the next two months ( or in two hours)?
What will happen next?
You know everybody is talking about it… my investors, your family, fried the cab driver… everyone.
So, its just matter of days when this is gonna happen
One bad news or one bad interpretation news will topple the Dominos!!! It may happen tomorrow or after some days… the bubble is sure to burst.
You have 2 options now:
Either wait for the crash and say… thank god… I told you so.
Focus on the larger picture…life… your goals … portfolio dedicated to your goals and things that matter.
Hope you liked my second attempt to save the world from an insane misunderstood product. Share your views below in the comments section on what you think on Should I invest in Bitcoins? Share this article so that more of us get benefitted.