Cryptocurrency... Is it Worth it to Invest or a Mistake?

[Account Closed]

There is a lot of controversy on Bitcoin, Ethereum, Litecoin and other similar cryptocurrencies. Many experienced investors have come out and said that cryptocurrency is just a facade and there are other dangers involved that are not visible. On the other hand, we've seen several people make a ton of money on these investments and others lose the same.

I'm curious to see what some of you think on cryptocurrencies; whether they're good investments or just a waste of time. But more importantly, I want to know why. Thoughts?

[William Glass]

@Account Closed The underlying technology that powers Bitcoin, Ethereum, etc. called blockchain is pretty unanimously agreed upon as being a long-term transformational technology. The argument comes in as to who the winners in this new technology will be. This is what we saw during the dot-com bubble - pretty much everyone agreed the internet would fundamentally change our lives. The real concern was who are the winners and losers going to be. Right now the purpose of bitcoin and other cryptocurrencies do not fulfill the 2 purposes of money (I'm stealing this from Ray Dalio the famous investor who started Bridgewater the largest hedge fund in the world). 

1. A store of value 
2. A medium of exchange

Currently, most cryptocurrencies do not accomplish either of the above as "investors" aka speculators are not utilizing these digital currencies to make purchases because of the price fluctuations. Yes, Japan, Australia, and others now accept cryptocurrencies the data around them being used in day to day transactions is scant (if anyone has data to prove otherwise please share that would be interesting information). I work for a technology research company and there are tons of people who are playing the crypto game. I've had uber drivers and caterers talk about cryptocurrency and have even gone to a local SWFL Cryptocurrency meetup that occurs monthly in Fort Myers where people go to talk about the top 10 cryptocurrencies and why they have invested in them. 

Disclaimer- I am not invested in cryptocurrencies and have no plans to be until the bubble bursts or a clear winner or loser comes about. In my opinion, you are speculating if you "invest" in cryptocurrencies at this point and you have to be okay with losing 100% of your capital. Don't fool yourself into thinking you are an investor you are a speculator and momentum investor. The only caveat is if you truly have information or understand something about one of these thousands of coins that give you a competitive advantage. 

I'm not invested because I'm not smart enough to figure out when the bubble is going to burst and I try to abide by Warren Buffett's rules of investing

1. Don't lose money
2. Don't forget rule #1

I absolutely love talking about cryptocurrencies and believe in the underlying blockchain technology. My thought it most of us in the real estate game are here for the distinct advantages real estate has to offer from cash flow, appreciation, inflation hedge, tax benefits, etc. I don't see any of those benefits in cryptocurrency and I don't have enough capital to risk in order for any "big gains" to be worth the loss of my principal. Other opinions are appreciated!