Cryptocurrency, a little unknown to the common folk, is a form of digital currency that requires real money to acquire. Money is a very valuable asset that requires time and labor in exchange for it. The worst thing you could ever do with real money is invested in something you know little or nothing about. This was, and always has been, the basis of my amateur logic when it came to investing in anything new and unknown.
The second worst thing, I thought, was missing out on a huge investment opportunity because of an ego dilemma. When others are boasting their successes like a badge of prestige, it takes a strong-willed character to remove any temptation to give in to the pressure. To jump on the bandwagon with everyone else. To be another face in the crowd. Who would want to be a follower anyway?
Well, ironically enough, that person was me. Even though I didn’t plan for it, I ended up buying a one-way ticket on the bandwagon I thought I swore to never get on. It hit me so fast I honestly couldn’t see it coming. This is the story of what I wish I’d know about cryptocurrency before investing in it.
The year is 2017 and the new craze is Bitcoin. Everywhere I looked, whether it be the bookstore, on the TV, or the login screen to my email account, you were not safe from the inevitable of hearing about cryptocurrency. Even the coworker who prides himself on all the fancy family trips he can’t afford is raving about it. Probably the last person you think would be giving investment advice. When a decentralized process is developed for peer-to-peer transactions, you bet your last dollar that people will be contemplating how they can get a piece of the pie.
In 2017, I saw a huge run to the top for the first cryptocurrency. Bitcoin closed the year with a high of over $19,000. That was an amazing increase from the $650 it started the year off with. Many will say that there is no sense of investing at this point because the train has passed. But novice investors like myself don’t venture down the pessimistic road so I dove headfirst as any rookie would. Then I learned why every single savvy investor preaches the same thing, never invest in what you don’t understand.
1) Cryptocurrencies are extremely volatile
Never in my investing life had I ever seen a gain close to 2000% on anything. Not a single investment has shot that high up in a little less than a year. If you need proof, look up BTC-USD on Yahoo finance, plug in the date range (1/1/17 to 12/31/17), and see it for yourself.
