The last several months have seen a lot of price movement-and hype-surrounding Bitcoin. Some have hailed the cryptocurrency as the wave of the future, while others have called the market a fluke that won’t last.
Bitcoin has seen some selling in recent days, and that selling could be indicative of a significant exodus from the digital currency. Bitcoin recently traded for over $7500, but has since lost some steam and is trading for under $7000. Could the recent sell-off be the beginning of the end for the currency which has gained several hundred percent since the start of the year? It remains too early to tell. One thing is for certain, however. Bitcoin seemingly meets the classic definition of a bubble, and bubbles eventually pop.
Investors in the cryptocurrency do not appear to be buying Bitcoin as a store of value, but rather as a speculative play in the anticipation of higher prices. This is no different than the dot.com boom in the early 2000’s, or the housing boom seen just a few years later.
Many investors obtained interest-only mortgages to buy real estate they could no really afford, in the hopes that the market would simply just keep going up, and they could later sell at a hefty profit. While such a strategy may have worked for some time, the bubble finally popped and many were left holding property they couldn’t afford that suddenly had lost a significant amount of value.
There is a good chance that some Bitcoin investors have used capital they cannot afford to lose to invest in the digital currency, and others who may have put a significant amount of their savings into Bitcoin. If, or rather when, the Bitcoin bubble pops, many of these investors could be saddled with hefty financial losses and nothing to show for their efforts.
It’s all about investing in a store of value.
Although gold prices may fluctuate, the metal is recognized and valued all over the globe for its ability to protect wealth and act as a store of value. The comparisons of Bitcoin to gold simply don’t make sense, and those that believe that Bitcoin is a real alternative to gold may be in for a rude awakening.
If you want to put some money at risk speculating on Bitcoin, go right ahead. Just keep in mind that’s exactly how it should be viewed: as speculation.
If you want to invest for the long-term in an asset that has been considered reliable for thousands of years, choose gold.
Investing in physical gold has never been easier than it is today. Speak with an Advantage Gold account executive today about the potential benefits of gold ownership. Our associates are here to answer any questions you may have, and can even show you how to buy and hold physical gold using your IRA account.
Don’t get caught up in the next “big thing.” Investing in this manner usually does not end well, and the current cryptocurrency craze will likely be no different.
If you want to speculate, do so with capital you can afford to lose. If you want to invest for the long-run in assets with a long history of wealth preservation and value, invest in gold. Call Advantage Gold today at 1-800-341-8584 to learn more.Tags: advantage gold, bitcoin, bubble, cryptocurrency, digital currency, gold, store of value