Here’s the best way to know bitcoin is not a conservative investment, but a terrible get rich quick scheme, “probably rat poison squared” even, as Warren Buffet calls bitcoin:
You see bitcoin or another cryptocurrency’s ATH (All Time High) prices going higher and higher, and you think now’s not a bad time for a second mortgage on your house.
Or a first mortgage:
“I’m all in yall! Just took out a 250k loan against my house and put it all into bitcoin. This dip feels like the perfect timing. LETS GOOO!!!”
Thinking of bitcoin or cryptocurrencies or ICOs as a way to get rich quick…
Or something to buy with money you need for something else…
Or money you don’t even have…
Is rat poison squared.
Anyone who is thinking about investing in bitcoin that way is not a conservative investor.
And if they take that approach to investing with any other kind of security or asset they are not conservative investors either.
Some people took a foolhardy approach to investing in bitcoin. But that doesn’t necessarily mean bitcoin is an inherently high-risk, high-reward investment.
But depending on one’s approach, anyone can definitely make bitcoin, just as much as they could any other investment, business endeavor, or risky venture.
Speculating on the possibly enormous rewards from potentially cosmic growth in the all-time high price of bitcoin is exciting. But it may be intoxicating.
This approach is appealing to those who have already seen their fortunes improve vastly from investing in bitcoin, or who believe it be the world’s reserve currency soon.
A more sober, conservative approach to investing in bitcoin than considering the all-time high price of bitcoin and its future possibilities is to track bitcoin’s yearly price lows, which can be done here.
As Twitter user “1stCrassCitizen Frogolocalypse” pointed out on Dec 30th, 2018:
I've been saying it for years. Don't look at ATH's, look at yearly lows. That will tell you the growth in hodlers.
2012 – $4
2013 – $65
2014 – $200
2015 – $185
2016 – $365
2017 – $780
2018 – $3200
That tells you the growth in the people who won't sell at any price.
— Frogolocalypse (@1stCrassCitizen) December 31, 2018
You can tell bitcoin is a conservative investment from its yearly price lows.
Seven years worth of yearly bitcoin price lows show that investing in bitcoin to hodl for the long term has been a very profitable savings and investment strategy for bitcoin hodlers.
Looking at the yearly price lows for bitcoin cancels out the noise from the day traders and naive speculators, and shows you how strong growth in bitcoin hodlers and users has been.
Warren Buffet is currently sitting on a stockpile of $132 billion in liquid assets ready for a major U.S. equities splurge. He’s just waiting for stock prices to correct lower.
Buffett wrote in his 2019 letter to Berkshire Hathaway investors:
“In the years ahead, we hope to move much of our excess liquidity into businesses that Berkshire will permanently own. The immediate prospects for that, however, are not good: Prices are sky-high for businesses possessing decent long-term prospects.”
Forget the fever for bull run profits off all time high bitcoin prices.
Savers and investors who are shopping for securities with Warren Buffett’s conservative value investing approach, if not his mind boggling amount of available cash to invest, can see from its yearly low prices that bitcoin possesses at least decent long-term prospects.
Published Wes Messamore
03/06/2019 – 0002 Space Age.