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My thoughts on Bitcoin reports

Bitcoin investor loses $2m

That is, if the reports in the media are true; it all depends on the real facts. 

An investor it is claimed lost $2m on the Bitcoin he had invested with FTX. We all know that this is a crypto exchange which went bust.

What we do not know is whether the $2m lost in this disaster or whether his original investment into Bitcoin was $100k, $200k, $500k, or $1m.

If his original investment was $500k then that is the amount of his true losses. 

I remember in 2022 when the Bitcoin halving took place, the newspaper report stated that Bitcoin investors lost half of their money. This was only true if an investor had bought Bitcoin during its previous peak. If I had sold my Bitcoin then I would have received more than my original investment. It all depends on when one had bought their Bitcoin.

Leaving all that aside, there are some lessons to be learned here; the main ones being:

1 Investing in Bitcoin in no substitute for your retirement fund

2 Do not invest in Bitcoin if the loss of your money will cause you considerable financial hardship

3 Diversify between different Bitcoin exchanges. That is coinbase, blockchain, and others which are available.

4 Do not invest in Bitcoin if you cannot stomach the thought of losing your money.

It is important to keep in mind that whenever there is a chance for capital gain, there is a chance for capital loss. Investors are betting on the chances that Bitcoin will rise in price. It is just a matter of understanding the risks when investing in Bitcoin.

There is no method of investing which will guarantee that you will not lose or that you will receive an x amount in return. Past performance is no guarantee that whatever happened in previous years will repeat itself in the future.

Have some spare cash to invest in Bitcoin and are prepared to lose it?

Then check out the coinbase, a well-established crypto-exchange. Coinbase makes it easy to buy and sell bitcoin. Check it out here:

https://coinbase.com/join/gochwv

 

Disclaimer: I may receive a small commission if you sign up for coinbase.

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Risk and Reward

Investing risk and Reward

Written by R. A. Stewart

Weighing up the risks and rewards of various investments is doing your due diligence which is the responsibility of every investor.

There is no shortage of choice for investors to get involved with but it is a matter of choosing the ones which are right for your personal circumstances and goals.

Here are my personal views of some of the types of investments available:

High interest accounts with Finance companies

If a company is offering you an investment offering you a high interest; it can only mean that they are also charging high interest to their borrowers and the reason why some people are prepared to pay a higher rate of interest is because they have been turned down by a bank. This could only mean one thing. “These are people who are at a higher risk of defaulting on their loans.”

During the Global Financial Crisis of 2007-2008. Several finance companies in New Zealand went into liquidation. Prior to this some financial commentators warned people that the high interest rates being offered by these companies does not reflect the risk they are taking.

Investing in Gold through an online investing platform

Investors are able to invest in gold through the internet via apps similar to Sharesies, Hatch, and Robinhood but is this a safe way to invest?

I am not so sure because the problem with gold is that it provides no income, therefore investors are relying on capital gains to make money. 

It is the transaction fees which could kill off any likelihood of profit, however, having said that, this is a good way to get involved in gold as an interest for a modest outlay. Just make sure you only use money which you would class as discretionary spending money.

Investing in Bitcoin

Is investing in Bitcoin a safe investment?

My answer to this is that nothing is 100% guaranteed, Bitcoin is a volatile investment. If you are prepared to ride out the lows then you can make capital gains for you. 

It is not a substitute for your retirement fund and under no circumstances should you invest your entire life savings in bitcoin. The same is applicable to the share market and gold.

If you have discretionary spending money then using it to invest in Bitcoin is the way to go and who knows, you may become the next Bitcoin millionaire.

There are risks with Bitcoin but if you use your common sense and learn as much about the risks as you can then you can reduce your chances of making choices which can be costly.

Investors have so many options to invest these days but there comes the risk of losing due to an economic downfall therefore, it pays to be on the conservative side. That is to diversify and spread your money around. 

About this article

This article is of the experience and opinion of the writer and may not be applicable to your personal circumstances therefore discretion is advised. You may use this article as content for your blog.website or ebook.

Read my other articles on www.robertastewart.com

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“Is Bitcoin right for me?”

Answer to the question  “Is Bitcoin right for me?”
It all depends on what the money is going to be used for. Bitcoin is not
the place to invest savings which are for a house deposit or vehicle.
Bitcoin is not a substitute for your country’s retirement scheme.
Because of its volatility only discretionary spending money should be
used for buying bitcoin. What is discretionary spending money? It is
money that you can fully afford to lose. Some examples of
discretionary spending are money which is used for betting on horse
races or lotto, money used for dining out, and holidays. If you have
debts then any discretionary spending money you have should be
used to reduce that debt. Less debt also means less interest you
have to pay to service that debt.
The other factor to consider when deciding whether bitcoin is right for
you is your risk profile. If you have little tolerance for risk then bitcoin
is not for you. Life is too short for you to be constantly losing sleep
over how your bitcoin investment is doing.
In a nutshell, the only money which should be used for purchasing
cryptocurrency is money which you can fully afford to lose. And then
maybe, you will get a good night’s sleep.
Thinking about giving cryptocurrency a go? Here is something which
may interest you

https://coinbase.com/join/gochwv

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How low will bitcoin go?

Question: How low will bitcoin go?

Answer to the question “How low will bitcoin go?”

 

That is the $64,000 question. I don’t think anyone really knows and if someone professes to know then you should check their credentials for making such bold claims. 

It should be pointed out that something is worth only as much as others are prepared to pay for it. If there are more sellers than buyers then the price drops. If people are greedy then the market will take advantage of it.

Many of the same factors which affect the share market are also present in cryptocurrency. I think it is no coincidence that the slide in bitcoin values has come at the same time as the share market slide.

Once the share market recovers then bitcoin may follow suit and notice I said “may,” without giving any guarantees because bitcoin has such a short history that it is difficult to predict its future but based on the last ten years it seems that bitcoin has gone through it’s highs and lows and this gives investors at least confidence that it is likely to recover but when will this be? Some are predicting that it will be late 2023 or 2024. Who knows?

 

Thinking about giving cryptocurrency a go? Here is something which may interest you:

https://coinbase.com/join/gochwv