Friday, December 31, 2021



Volume: 994                January 1, 2022


If you’re considering investing in Bitcoin, read this first!

Caveat Emptor

We’re entering the year 2022 and Bitcoin remains interestingly mercurial.  When many look for a ‘new’ or ‘more promising’ investment they look around and see everybody else getting rich with Bitcoin.  They wonder if they shouldn’t get in on the action as well.

Bitcoin is a really hot topic among investors, potential investors, and the media.  Even major corporations have modestly invested in Bitcoin.  It’s for this reason that folks wonder if they shouldn’t get in on this ‘Bitcoin Boom’.  In March of 2021 Bitcoin spiked at an all time high of over $60,000.  This is literally twice what it was worth just 90 days earlier.

So promising was this spike that Elon Musk made some investments in this cryptocurrency.  There was even an NFL player who took his salary in Bitcoin.  While the mercurial rise in value has been a boon for those invested in Bitcoin, that doesn’t mean its right for everyone.  While some investors stand to reap great returns, more recent investors are just as likely to lose their shirts.

Let’s talk about what makes Bitcoin as well as other cryptocurrencies a highly questionable investment.  To me, these reasons show it to be a bad idea to spend anything on Bitcoin.

#1. BITCOIN IS INCREDIBLY VOLATILE:  The price of Bitcoin, as with all cryptocurrencies, is wildly volatile because it’s a very young currency, only time will tell if it can survive in the long haul.  Bitcoin is subject to crazy fluctuations and experiences wide swings within a week, a day, or even in a few minutes.  David Goodspeed, a noted financial analyst with Weiss & Goldblum Investments says about Bitcoin, “If you don’t like its [Bitcoin’s] price, close your eyes and count to ten.  Typically, certain fundamentals would support currencies in general.  But Bitcoin isn’t a fully functioning currency and its “fundamentals” are still emerging and evolving.

In December of 2017 Bitcoin skyrocketed to the $20,000 mark.  That might be attractive now that it’s trading at around $60,000.  But if you look at the 2017 ~ 2018 90 day figures you’ll see that only 90 days after hitting the $20,000 mark, in February 2018, it crashed to under $7,000.  This nosedive could easily happen again.

#2. BITCOIN ISN’T MONEY:  Bitcoin is risky because while it’s a tradable asset, it isn’t backed by anything.  The only reason Bitcoin has any value at all is because the people trading it say it has value.  It lacks government and regulatory bodies to help it retain its value.  Bitcoin’s value is really just “made up" and that should scare anyone.  Investor Warren Buffett did says, “[Bitcoin] has no unique value at all."  The guy’s no slouch, and I for one will listen to him on this matter.  Bitcoin value is the product of one’s hopes, dreams, and imagination, and nothing more.  This makes it a really scary thing to trade in exchange for real assets such as currency, real estate, and precious metals.

#3. BITCOIN IS NOT AS ‘DISASTER PROOF’ AS YOU MIGHT THINK:  I often hear that Bitcoin is a great hedge against inflation, fiat currency, banks, and financial systems, should they crash.  Panic and hysteria surrounding the Covid-19 hoax have helped drive this myth.  But it’s only a myth.

If fiat currencies or traditional financial systems ever fail, governments and central banks will respond by holding tangible assets like gold in vaults as an alternative.  You can be sure they won’t be holding Bitcoin in their vaults.  What if the collapse went even further and it took down technology, power grids, or even the entire internet?  How would you have access to your Bitcoin?  This puts the lie to Bitcoin being a ‘disaster proof’ hedge.

#4. TOSSING A COIN IS AS GOOD AS INVESTING IN BITCOIN … MAYBE:  If you are a futures trader, you can at least rest assured that exchange futures markets are regulated.  If you have a dispute, you can take it to a regulatory audience.  If you step outside this reality toward the unregulated and decentralized world of cryptocurrencies, you take your chances and have absolutely no audience.  Taking this risk is your decision, and if you do take it, at least now you understand what you’re getting into.  You can make a bundle of money or you can lose it all.  Just be sure, as gamblers and investors in the stock market say, “Never bet more than you can afford to lose.”

I’m Max, and that’s the way I see it!


  1. Max, one can trade Bitcoin and Ethereum Futures on the CME/CBOE

  2. Yes, and one can also gamble his money away in Las Vegas. The stock market is nothing more than a roulette wheel at best. Cryptocurrencies are even worse than a roulette wheel, and are affixed or rigged roulette wheel