What If I Want to Buy Bitcoin?

You want to get rich, and you think cryptocurrencies are the way to go. Beware: those massive returns you've heard about come with massive risk

Ruth Saldanha 23 February, 2021 | 11:08AM

 

 

Narrator: You’re on the internet, which means you know about cryptocurrencies. And if you’ve spent even a few minutes listening to the crypto evangelists out there, I can guarantee you’ve thought about it. You want to get rich, and you think crypto’s the way to go. So let’s talk.

What if I want to buy Bitcoin?

Let’s start with the obvious. There’s nothing wrong with buying Bitcoin. Or any other cryptocurrency. But don’t try and convince yourself that it’s a sure thing.

Remember, this isn’t even the first time that Bitcoin’s been big. Back in 2017, Bitcoin hit highs of over $19,000 and everyone went wild.

Sounds familiar, right?

But then, in January, it started to fall, and in one month, it went down 65% - down to $6,000. That year, some coins lost over 90% in value. Those returns – come with massive risk.

Which isn’t to say the same thing will happen this time – but you should be aware that it could.

Kristoffer Inton: Bitcoin is a speculative asset and not a safe haven. It isn’t as liquid as cash, it has a really short history, and there isn’t widespread acceptance of crypto as a functional purpose – I mean, have you tried paying crypto to buy a banana?

Narrator: Plus, you could forget your password, and like that guy in San Francisco, you could lose $220 million.

Do You Need to Own Bitcoin?

The Morningstar View

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Ruth Saldanha

Ruth Saldanha  is Senior Editor, Morningstar.ca

 
 

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