Bitcoin is the talk of the town. Wherever you look, people are losing their minds over it and are desperately trying to get in on the action. This year saw the Bitcoin rise from $1,000 to $19,000 and has made a lot of people rich. This has led a lot of newbie investors excited and they are taking desperate measures to buy bitcoin.
People have racked up huge debts and it has been observed that some people have mortgaged their homes to buy bitcoin. Joseph Borg, the Director of the Alabama Securities Commission said in an interview, “We’ve seen mortgages being taken out to buy bitcoin. … People do credit cards, equity lines. This is not something a guy who’s making $100,000 a year, who’s got a mortgage and two kids in college ought to be invested in. You’re on this mania curve. At some point in time, there’s got to be a leveling off”
The Securities regulator that the lack of regulation is making it hard for the regulators to keep up with the pace of cryptocurrencies, “As [technology] continues to accelerate and continues to increase, regulators have got to understand what it is that the innovation’s coming up with and we’re still trying to get educated.”
Borg is not the only one with concerns. Grant Sabatier, who made his fortune from bitcoins also advises against investing in the currency. He invested in the currency when it was going steady at $200 and now his wallet holds $1,148,720. He admits that it was the easiest money he ever made but advises against it as it is very unstable.
In his blog, he explains that investing in something unstable is always a poor choice and it’s a gamble that does not pay off most of the time. He advised the would-be investors, “If you do decide to buy bitcoin, I encourage you to buy responsibly. Don’t buy using more than 1 percent of your net-worth, and be honest with yourself: Bitcoin is a gamble, not an investment”
All of us like would love to make easy money but bitcoin has a lot of risks accompanying it. A recent hack saw the loss of $60 million worth of bitcoins. It could also fall down to $1,000 suddenly. So, be prepared to sustain heavy losses if you still do decide to invest.