If you're reading this, you've probably seen the insane run up of Bitcoin in the last few years, and if you're like most people, you're experienced full on FOMO, that's fear of missing out.
Maybe you don't know much about cryptocurrency, you might not even be sure what a Bitcoin actual is, all you know is that everything it touches turns to gold. Maybe you go into your broker, and you typed Bitcoin into the ticker bar, just to see what comes up. Maybe you've even come across a few of the popular OTCs and considered plopping a few grand into one of them. BTSC, Bitcoin Services Inc, BITCF, First Bitcoin Capita, GBTC, Bitcoin Investment Ordinary, those are the ones that come to mind, but should you buy them? The way we see it, there's two types of investors in this world, you have the fundamental investor or the Warren Buffett style, who reads up on a company, figures out how much money they make, figure out how much money they're likely to make in the future, and then determines if they're undervalued, and if they're undervalued, he buys.
If they're overvalued, he doesn't. Then you have the technical investor, who trades on charts, momentum and hype. They use all types of different studies and figure out where there's money to be made, and they go in and make that money, and get out. They don't usually buy based on what they think a company is worth, they trade momentum and hype. Many of these fundamental Warren Buffett style investors, they're the old school guys, the old school traders. Take a look at someone like Mark Cuban, super successful, quite literally achieved what many would consider the pinnacle of success.
But he recommends one percent portfolio investment into cryptocurrency, because he understands risk management and risk analysis and that's what made him successful. Now I'm not saying that's the wrong approach, I'm not saying you should put more than that into crytocurrency, I'm not saying that these types of guys are wrong, I'm not saying they're right. I'm saying these guys, people like Mark Cuban, these are the Warren Buffett style investors and they're successful because they found a method that works for them and they stick to it. But you, are not the only one that noticed cryptocurrencies.
Particularly Bitcoin, and they have noticed that Bitcoin is on fire and they want that fire, but there's a problem. Cryptocurrency isn't easily accessible to those who are not technical savvy, you might think getting cryptocurrency is as easy as sending an email, but ask someone over the age of 45, what a Bitcoin is? Or what they think of blockchain technology.
And you're going to get some blank stares, couple that with a lack of understanding, a furious bull market, unlike anything we've ever seen in investing, you're going to get a lot of people who want in on the momentum, but have no idea how to get in, and have no idea what they're buying into.
September 19, 2018
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