Investing in cryptocurency …. Safe and current or risky fashionable craze???

Whilst there is thousands of different opportunities available to investors both experienced and new to the markets, cryptocurrency is surely one of the most talked about alternatives at this moment in time.

But what actually is a cryptocurrency? (or crypto currency) and is it a sensible choice?

Without getting too technical a cryptocurrency is a digital or virtual currency that uses cryptography for security, it is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.

One of the first to come into existence and definitely the most well-known at this moment in time is Bitcoin. Bitcoin was created in 2009 – Since then there has been numerous other cryptocurrencies created – Also known as altcoins, as a blend of alternative coin, but Bitcoin remains the most popular and most talked about.

It is common now to see all sorts of people from various different backgrounds and experiences on Social Media platforms such as Facebook having their say and giving backing or otherwise to the ‘new craze’.

The facts are that Bitcoins value never actually even topped $1 in 2010! Its highest price for the year was in actual fact a somewhat measly $0.39! However….. By February 2017, Bitcoin broke its previous 2013 record high by hitting the $1169.04 mark.
Since May of the same year it continued to climb surpassing price milestones extremely quickly. On November 28, 2017 its values crossed the $10,000 mark and less than 24 hours later it was trading above $11,000. The price kept surging in December and hit an all-time high of an eye watering $19,783 on December 17.

Warnings of the volatility have since been recognised though with the price sliding in the last month or so. Bitcoin was trading at (a still huge profit on any original investment) significantly lower $11,251 on January 18th 2018.

If you are considering investing in Bitcoin or any other cryptocurrency you should be prepared for extreme volatility. The price can move by as much as 20% in any one one given day and you could quite easily lose half of your cash in a far quicker time that you would if investing in the stock market.
Remember bitcoin yields nothing and its main source of value is scarcity. Most bitcoin activity is trading not investing.

I will leave legendary investor Warren Buffet to have the final say for now, he has warned that Bitcoin backers face disaster – and suggested the ‘online craze’ WILL ultimately fail.

Buffett said: ‘In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending. When it happens or how… I don’t know.’