Life is filled with regret. If I could go back in time, I’d invest in Bitcoin when I first heard about it years ago – but it made little real sense to me then. And honestly, it makes little real sense to me now. I’ve read up about blockchains, and digital currencies and mining and all that it entails – so while I have developed an understanding on a technical level, on a practical one it all still seems like voodoo.
Many of my peers have invested in the technology, putting spare cash into Bitcoin, building mining rigs and making quick gains during the spikes in the currency. With the latest spike, which saw the price of Bitcoin more than double in the last few months, new investors have been jumping in.
There are countless old world economists though, who aren’t convinced, believing it to be a bubble.
Says The Economist, in its Buttonwood column which likens the current rise in BTC to the Greater Fool theory.
“People are buying Bitcoin because they expect other people to buy it from them at a higher price; the definition of the greater fool theory. Someone responded to me on Twitter by implying the fools were those who were not buying; everyone who did so had become a millionaire. But it is one thing to become a millionaire (the word was coined during the Mississippi bubble of the early 18th century) on paper, or in “bits”; it is another to be able to get into a bubble and out again with your wealth intact.
If everyone tried to realise their Bitcoin wealth for millions, the market would dry up and the price would crash; that is what happened with the Mississippi and the contemporaneous South Sea bubbles. And because investors know that could happen, there is every incentive to sell first. When the crash comes, and it cannot be too far away, it will be dramatic.”
Obviously the people who’ve invested in Bitcoin (and possibly made fortunes doing it) don’t feel the same way. But you tell us! Do you think Bitcoin and other cryptocurrencies are a fad – a bubble on the verge of bursting – or is it the way that money exchange is going? Is it too late to invest, or is there still time to get in before it goes belly up?
The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of Critical Hit as an organisation.
Last Updated: November 10, 2017
Magoo
November 10, 2017 at 11:01
Anyone here who follows crypto twitter? Or invests in and trades crypto?
There is no shortage of opinions by respected economists, all of which vary from “It’s a scam” to “It’s the future global currency.” There’s really no way to be sure right now.
But one thing is for sure, no one has regretted investing in it yet. And people have been warning of the crash since it hit a few dozen dollars. Current price is over $7,000.
Side note: But ask any crypto enthusiast and they’ll tell you that the true significance of Bitcoin is not currency but blockchain tech.
Skittle
November 10, 2017 at 11:02
Its’ going to bomb. I’m right, you wrong. HA!
Caveshen Rajman
November 10, 2017 at 11:56
I wonder why economists who are typically employed to make educated financial decisions that guide the impact of markets based on established physical currencies would be averse to the idea of a competitor… 😛
Magoo
November 10, 2017 at 12:05
A prevalent argument but that’s not to say their observations are meritless.
Gr8_Balls_o_Fire
November 10, 2017 at 11:10
We are talking about something that is at it’s very fundamental level, binary code. Binary code is a language.
Make your decision from there.
I’m going to buy the English language. How do I find out who’s selling the English?
Magoo
November 10, 2017 at 11:20
Just no. xD
Gr8_Balls_o_Fire
November 10, 2017 at 11:40
Are you selling the English?
Magoo
November 10, 2017 at 12:03
No I’m selling paper.
Gr8_Balls_o_Fire
November 10, 2017 at 12:22
I have a forest that may interest you.
Gavin Mannion
November 10, 2017 at 11:10
Honestly I do think it’s something that will be shutdown and people are going to lose all their money. The recent surge in price has been insane and no real currency’s ever grow that quickly.. things only fall that quickly
Marco
November 14, 2017 at 11:42
That’s true, although most currencies in the world depreciate. I mean, our rand purchasing power has decreased 3 fold in like 10 years, while the Bolivar has depreciated thousands of percent.
But yes, it will crash in the future, of that I have no doubt. But unlike a government or currency in the traditional sense, there is no central point of failure. So when people point out that things like the South Sea bubble and Dot.com etc etc….the thing with bitcoin is that there is no CEO to go after, there is no board of directors, there is no vault to break into. It’s literally opt-in and opt-out, pure market forces determining its success.
Admiral Chief
November 10, 2017 at 11:45
Bah, hogwash. My real value is in my Steam library!
Gr8_Balls_o_Fire
November 10, 2017 at 11:49
And those Steam cards!
Admiral Chief
November 10, 2017 at 11:57
YUSSSSSSSS
Caveshen Rajman
November 10, 2017 at 11:55
Let’s be honest here though, people have been claiming the burble will burst for all of the entire year it could have taken them to just buy and hold a few BTC and see what happens. Every currency can fail so I don’t see why crypto is some special snowflake that will fail harder or something, but the lack of regulations will probably impact it more than any bubble-bursting naysayers, and when that day comes it’s just a case of how much do we want our current established channels to stay in the past, versus embracing the future.
Magoo
November 10, 2017 at 12:14
Only recently have we seen some very cementing use in the case of Venezuela and Zimbabwe. When it’s no longer easy to ignore, will governments keep fighting, sabotaging and stagnating it? Will they embrace and try to control it? Can they even pull that off?
Gr8_Balls_o_Fire
November 10, 2017 at 12:21
You cannot use the words government and “embrace”, “control”, “pull that off” together. Your question is invalid.
Admiral Chief
November 10, 2017 at 12:22
BUT HE USING THE ENGLISH
Gr8_Balls_o_Fire
November 10, 2017 at 12:23
I WANT TO BUY THE ENGLISH
Admiral Chief
November 10, 2017 at 12:29
I’ll sell it to you for 3 bitcoins and 11 micro-transactions
Gr8_Balls_o_Fire
November 10, 2017 at 12:34
No lootboxes?? Something fishy about your offer.
Admiral Chief
November 10, 2017 at 12:38
You can trade the bits and tees for lewd things
Gr8_Balls_o_Fire
November 10, 2017 at 12:54
Lewdboxes?
Is this something new?
Admiral Chief
November 10, 2017 at 12:55
Yes, you give them cashmonies, they act lewd by shafting you with fluff
Gr8_Balls_o_Fire
November 10, 2017 at 13:28
If I do that then I deserve to get shafted
Admiral Chief
November 10, 2017 at 13:04
LOOK AT ALL THESE COMMENTS
Gr8_Balls_o_Fire
November 10, 2017 at 13:29
ALL IN THE ENGLISH
Matthew Figueira
November 10, 2017 at 13:12
I hope it doesn’t burst 😐
Alien Emperor Trevor
November 10, 2017 at 14:38
But then we could call it BURSTCON! #amirite!
Yondaime
November 10, 2017 at 14:15
If i had the funds i’d do it just for the ride. Doesn’t hurt to invest the cash if you’re willing to overlook loosing it.
Marco
November 14, 2017 at 11:36
If we are being honest with ourselves, I think the main reason people have feelings on wildly opposite ends of the spectrum is that 1) They missed the boat 2) They are riding the wave higher and higher. Let’s not divorce our opinions from our biases. I for one am exceptionally happy that I got into the space long ago, and have reaped the rewards. However, I’m exceptionally cautious telling people to invest into something as risky as bitcoin. I always tell them that the greatest value you can make from Cryptocurrency is LEARNING about it. Invest TIME & Money. Treat it like any Industry. If you invest time into understanding a nascent industry, you might be able to make some money from it and learn about developments that interest you. Treat it like a cash grab and most people will lose their money more than anything. I think the problem is that there is a glorification of “making it big”, whereas for the many people who made a lot of money from an Industry, there are countless others who saw their collective asses.
Whenever people have called me and asked about Bitcoin, besides the trading/investing side, I first try to get them to learn about it and why it exists. Once people know about the risks , then they should treat it like any investment; carve of a section of your disposable income to invest in a high risk high reward space. So, to cut a long paragraph short: invest in things you understand and see long term value growth in going forward. If not, don’t.