What Is Cryptocurrency?
Over the last year or so, one of the biggest news stories has been Bitcoin prices.
Bitcoin is one of the first cryptocurrencies to come into existence. But what is a cryptocurrency?
Let’s turn to our friend, Google.
So basically it’s a currency like any others, it’s just that it’s not regulated by any banks. The money in your accounts has an unbreakable encryption, meaning it can’t be hacked and stolen. It also means any payments can’t be traced back to the source, or it’d be very difficult to do so.
What’s It Used For?
Bitcoin rose to fame back when the Silk Road website was in use. A marketplace for every illegal thing you could think of, from drugs to guns, from extreme erotica to rocket launchers. People could go on this website using a special browser and buy goods from this website using Bitcoins.
It has since gone from something to be used to buy illegal things, to being something else entirely.
It’s now a get rich quick scheme and one that has failed.
You see, if you invested around $100 in Bitcoin seven years ago, when it was still cheap and no one knew really what it was; last month it’d have been worth around $30m. For some reason the stock shot up, something that was once worth a few dollars would now be worth over $20,000.
Unfortunately, this is when people started taking notice of Bitcoin, thinking, “Hmmm, I should really start investing in this! I’ll be rich!”
Sadly however, you’ve arrived to the party too late. You’ve arrived at the party around the time people start throwing up into a bath, you’re at the time people are sat outside in the mud, crying while clasping onto a half drunk bottle of beer.
People are now investing all of their money into this unusual currency that is more effort than it’s worth to set up. Seriously you have to go on about three or four different sites to set it up.
What people don’t realize is the Bitcoin and other currencies like it are at its peak. It was in an ever expanding bubble. A bubble that has now popped.
Should You Invest Your Money?
My opinion, no.
If you are however, don’t put everything you have into this. In just a few days Bitcoin has gone from £15,000 per Bitcoin to just £7,500. That’s 50%!
Now a day after look that up, this is where it’s at now.
So imagine you’ve heard of this great thing everyone’s talking about called Bitcoin. You’re thrown £500 into it hoping it’ll make you a quick bit of cash.
Now your £500 is worth less than £250. Now what do you do?
Do you cash out and take the £250 loss? Or do you keep it where it is in the hopes that it goes back up? By the current trend though, another couple of days your £250 is now only worth £125.
Maybe it won’t be long before that currency is worthless once again. People have gone for cheaper options such as Litecoin, Ripple and Ethereum; but the same trend is happening.
It may eventually go back up; but if you’re going to invest, I would certainly wait to see what happens. If it goes back to rock bottom, back to where it was in 2016, then it may be worth investing just in case something like this happens again.
But what people have done is they’ve invested while it’s at its highest and in just a day the equivalent of $100 billion disappeared into thin air.
Should You Cash Out Your Cryptocurrency?
Short answer, yes.
With what I’ve been reading online, the cryptocurrency bubble has popped. If you’ve invested while it was on the rise and you’ve made money, that’s great. But get out now before you lose it all.
If you’ve invested and made money and you haven’t cashed out, it’s likely you’ve lost 50% of what you had yesterday.
Get out while you can.
This is today’s version of the dot-com bubble. A period of time in the late 90s/early 2000s where internet companies were popping up everywhere. Eventually the bubble burst and many companies went bankrupt.
Except it’s not companies going bankrupt this time, it’s people.
What ever you decide to do, just be careful and don’t lose all of your hard earned money.
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