Bitcoin just breached $20,000. Bitcoins increasing success is on everyone’s mind during the past few months and the hype associated with it is forcing many to invest in it. The "Fear of Missing Out" is just too great when it comes to Bitcoin.
It really is confusing when it comes to Bitcoin, since the difference of opinion regarding the cryptocurrency is so stark. Half of the big-time investors claim that bitcoin is the new gold, whereas, others state that it is a speculative bubble that should be avoided.
Who should one listen to while considering investing in bitcoin? The naysayers or yay-sayers? The pessimist or the optimist?
The answer is not so simple and depends on one’s instinct. How bitcoin has surged in the past 12 months is really amazing. Never before has such a staggering increase in the price of an asset, been observed. Therefore, it can be said that this is unchartered territory, a place which no one is an expert.
Skepticism prevails
Everyone has heard of Warren Buffet. It is said that never in his life has he failed to predict the movement of a stock. He has vehemently opposed bitcoin. When asked whether people should invest in bitcoin, Buffet advised, "stay away from it. It’s a mirage… the idea that it has some huge intrinsic value is a joke. It’s a way of transmitting money.”
He is just one of the big-shot investors who have opposed bitcoin. Carl Icahn, who is the legendary activist investor, had the following comments:
“I don’t understand it… If you read history books about all of these bubbles…this is what this is.”
One might be intimidated by Buffet’s comments, considering his record of never being wrong in predicting investments. However, there’s always a first time for everything. He could be making the biggest mistake of his life.
Is it still undervalued?
On the other hand, Bitcoin enthusiasts state that even though it has breached $20,000 in value, the cryptocurrency is still undervalued. Some state that it will reach $40,000 in the coming weeks. However, some have also gone on to claim that bitcoin will reach $100,000 by the end of 2018.
Will their claims ever materialize? Only time will tell. Considering how many people have become millionaires due to the rising price of bitcoin, people are confident that bitcoin can reach the stated value soon enough.
Former hedge fund manager Michael Novogratz believes that bitcoin can be an alternative for gold. He explained:
“The whole market cap of all of the cryptocurrencies is $300 billion. That’s nothing. This is global. I have a sense this can go a lot further.”
The skepticism associated with bitcoin hasn’t stopped investors from investing in it. Even the Russian oligarchs have begun to invest in it. However, one shouldn’t be naïve and follow the big-shots. You should only invest in bitcoin after ample research and understanding what the cryptocurrency is. Informed decision is better than blind following.