Josh asked in Business & FinanceInvesting · 2 months ago

Is investing in cryptocurrency worth it?

So I started up a IRA and a 401k with work. I have a friend has been screaming at me to get into Bitcoin, so last week I dropped $100 into it. Nervous about doing so, but curious. I am interested in dropping $1000 now into it, but I not sure what I should know moving forward, my friend has kind of deserted me when I started asking questions. I come here for knowledge.

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  • cosmo
    Lv 7
    1 month ago

    Trading cryptocurrencies in small amounts carries large overhead costs.

    Note too, that your gains are taxable.  In an IRA the taxes are deferred, but eventually the gains are taxed at the full rate (not the capital gains rate).

    That being said, Bitcoins are designed to be deflationary.  That may become a VERY GOOD THING in this era where the government is printing money like it's going out of style. (As it may indeed be.)  The only other things you could invest in that are deflationary are TIPS (google them), commodity ETFs, or precious metals. (Bitcoins are sometimes described as "internet gold").

    There is a political risk associated with Bitcoin --- if they become really successful, the government could ban them.  This has happened in some other countries.

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  • 2 months ago

    Bitcoin is at best an alternative asset investment (includes things like art for investment, precious metals, collectibles).  Your entire portfolio should be at MOST 5% alternative assets  (mine is less than 1/2%).  Even then that 5% assuming your using gold as an inflation hedge and inflation has been really tame here in the US since the internet made price comparison shopping so easy.   Based on your small investment amounts I am assuming your a new investor.   Start with a 6 month emergency savings fund, then either a S&P 500 Index ETF, or start building 10 positions in dividend paying blue chip stocks spread across 10 different industries as the STARTING foundation for your portfolio.  Let your friend play the lottery and base his financial future on hopes and dreams, smart investors build a portfolio over time, brick by brick. 

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  • 2 months ago

    Bitcoin is a kind of digital currency. At the beginning, one coin cost only 0.01 dollars, and later it rose to 19,850 dollars. Some people say that it is a bubble, but what matters is that digital currency has created many rich people and business miracles.Whether it's a bubble depends on when you sell.

    • cosmo
      Lv 7
      1 month agoReport

      The first bitcoin purchase was a large pizza for 10,000 bitcoins.  Today, 10,000 bitcoins are $980,000,000.

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  • Steve
    Lv 6
    2 months ago

    Youll get next to no support for Bitcoin on this board. 

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  • 2 months ago

    Uh, it is a virtual asset, and ONLY exists on a server somewhere. They have been known to be HACKED..

    • cosmo
      Lv 7
      1 month agoReport

      The point about the blockchain is that you'd have to hack more than 50% of all the miners.  The Chinese government could possibly do this, no on else could.

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  • Anonymous
    2 months ago

    You need to choose your friends more wisely.

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  • 2 months ago

    Bitcoin is gambling.

    It could go way up or way down without notice.

    Stocks have value because there is a company underneath that stock trying to make money.

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  • Anonymous
    2 months ago

    Invest in bitcoin. I promice it worth it I heard bill gates uses it.

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  • 2 months ago

    Buying Bitcoin is NOT investing.

    Bitcoin is used as a form of gambling where buyers hope to sell them for more than they paid. Its value fluctuates daily as its novelty and popularity changes. Unlike stock where a business is earning money or a bond that pays an interest amount, there is no reason to expect Bitcoin to make money for you.

    If you wish to gamble, I recommend a casino.

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  • 2 months ago

    You started the IRA? Maybe don't go admitting that to everyone you meet.

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