Investing In Cryptocurrency: Nvidia Or Advanced Micro Devices?
Don’t get me wrong: I LOVE me some crypto, and I see blockchain-based currencies bringing massive disruptions not only financial services, but to our entire way of life. Sure, cryptocurrencies such as Bitcoin, Ethereum, and Ripple are going gang-busters right now, but that only reinforces thoughts of soon-to-be-realized-super-heated-bubble drama.
“The growth is astounding – the aggregate market capitalization of all digital currencies excluding Bitcoin has grown from $2.2 billion to over $71 billion so far this year. That is over 3000% growth in just five months. The growth is prompting many commentators to opine the industry is in a bubble. Indeed, many signs of a bubble are there… new projects are able to raise millions of dollars through “Initial Coin Offerings” (ICOs) before even launching a product. Money is now flowing into the market in seemingly indiscriminate ways… one day last month 99 of the top 100 assets were trading higher than the day before, and by large margins.”
Warren Buffett doesn’t like gold. Why? Because gold doesn’t MAKE money. It’s the same with currencies: they ARE money, they don’t MAKE money. Further, currencies are a hedging instrument used by corporations, traders, and big-money people…. that’s not us. Investing in currencies directly is expensive and unnecessary for the average investor, and returns on investment don’t warrant the risk.
Gold is a store of value that grows with inflation. If you consider Bitcoin or the other cryptocurrencies as stores of value (by the way, Ethereum was never designed as such), then they’re STILL not good investments. It’s that simple. Keep in mind, though, that investing is different than trading. Can you make money trading crypto? For sure.
And if they’re not currencies, what are they? They are a completely new asset class, which many are putting money into without understanding. It’s the hype that has me scared.
