Should You Invest Your Hard Earned Savings Into Bitcoin Cryptocurrency?

If you’re like most people watching the news and reading media publications, you’re likely itching to get aboard the Bitcoin train. You watch overnight millionaires talk on television or show their newfound fortune on YouTube. You read miraculous success stories of these digital investors buying a Lamborghini, a new house, a boat, or all of the above. You yearn to be among them! Is it too late? Should you cash out on an auto loan, a mortgage, dip into retirement or a long-term savings account?

Explore the reasons why you should not act hastily, and consider the negative implications that may occur when you use your savings to invest in Bitcoin or any other cryptocurrencies.

Bitcoin’s Intention Was Not “Get Rich Quick”

Yes, people have indeed discovered success by adopting Bitcoin early. The stories you read and watch are likely real indeed. However, most of these stories were never intended by the Bitcoin holder; out of a sheer chance of luck, they happened.

Consider the hundreds of stories of college kids, parents, or tech buffs discovering an old Bitcoin wallet on a hard drive that was stored in a box in the attic. To their amazement and surprise, they open up and remember firsthand that they had spent some time mining Bitcoin for fun. Many open that Bitcoin wallet to the realization that they are now worth millions or more.

The difference between these stories and investors of today is that the early Bitcoin adopters did not have to spend money most of the time. They partook in a computer hobby and stumbled upon success. Had Bitcoin never came to be worth so much, there would be very little loss on their end. Simply put, they did not risk a lot to discover their fortune.

There’s still a chance to mine Bitcoin in hopes of future fortune, but you’re likely thinking, “Should I make a big investment that will reward me in the months and years to come?” That is when you consider that sum of money sitting there in savings or as a liquid asset – a car, home, saving’s account, or something similar. You wonder to yourself – like many do – if that money would be better put to use in the form of Bitcoin.

Bitcoin’s Success Is Not Promised

It’s correct that Bitcoin has increased overall in the past several years. However, this growth was never promised, nor is it promised in the short or long term future. While making a small or moderate investment in Bitcoin is not a bad idea, putting yourself in a financially uncomfortable situation in hopes of future fortune is most likely a bad idea.

Imagine if tomorrow your savings (you likely have one in mind) was worth a tenth or a quarter of what it’s worth now. There’s nothing comfortable about that thought! However, if you transfered your savings into Bitcoin, that future could very likely happen. Bitcoin’s future is not guaranteed.

Two Example Scenarios of Risky Investments

Let’s say that in 18 months you have to make a large payment, let’s say ten thousand dollars. You decide, “Hey, this money is better off growing in the form of Bitcoin!” So you invest, and the market starts to increase. It’s so amazing, it quickly doubles, triples, even quintuples what you initially invested! Now your payment is due in 2 months, and you’re sitting upon a sizable portion. However, the unthinkable happens; Bitcoin crashes.

While you’re not worried about crashes, because you’ve seen Bitcoin rise from the ashes many times before, you’re faced with the obligation to pay off that debt. You’re forced to cash out. Perhaps you break even, beating yourself up for not cashing out when Bitcoin was at its peak.

This story happens around the world very often. People temporarily storing small fortunes in cryptocurrency are required to cash out at very specific times because payments are due. This is exactly why these types of investments are not recommended because they rely on unpredictable outcomes.

Let’s consider another scenario. You have a saving’s account, and you have more than enough to fulfill financial security. You take out a quarter or a third and purchase Bitcoin. You tell yourself, “If the unthinkable happens – if Bitcoin crashes – I will still have enough savings in the case of a life emergency.” This is a more ideal scenario than the first example given.

That’s because the money is not needed by a certain date. Bitcoin may go up and down, and you have the liberty of allowing your investment to grow steadily without worrying about the liabilities of an unexpected crash.

However, even though this scenario is more ideal than the first, it is not meant to imply that these kinds of savings-turned-investment strategies are good decisions by any means. You must critically evaluate every possible scenario. You must ask yourself, “If I lose this entire investment sum, would I be okay with that?”

Because market crashes are not the only possible threat; there may be a breach of security that result in your coins stolen. Or there’s a home disaster – such as a flood or fire – that destroy your cold storage wallet. Or perhaps the infrastructure of Bitcoin, for whatever reason, becomes unstable or un-usable. There are innumerable possibilities what could go wrong apart from market crashes.

Think of a Number: Determining Your Initial Investment

Don’t think in terms of savings accounts or cashed out loans. Think instead in terms of investment budget. You can and should set aside some funds to invest if you take Bitcoin seriously. This number should be well within your means to invest and should not place you in a financially uncomfortable situation. You must come up with the exact number or percentage of what you’re willing to invest.

You should be okay keeping that investment in the form of cryptocurrency for awhile – longer is better. Finally, you should not expect to “get rich quick”. This is a greed-feuled mindset that leads too many into bankruptcy, legal troubles, or broken relationships.

Consider Day/Short-Term Trading For an Investing Thrill

If you already have a long-term investment in place and want to be more directly involved in the day-to-day market, you might consider day trading a very small percentage of your investment funds. Consider it entertainment or gambling money. There’s so much to be learned by day trading, watching the markets, identifying patterns and trends, and making small profits little by little. This will allow you to feel the thrill of regularly trading Bitcoin or other cryptocurrencies without taking on the risk of tragedy if you make a mistake or if the market crashes.

Appoach your investments mindfully, and be reasonable with what sum you put in the market. Finally, do your research and learn all about the ins-and-outs of cryptocurrency as a whole. Create your own theory as to how society will use digital currencies in the future. Become well-informed in order to educate others who are getting into this wild world. You’ll find your patience may pay off in the end!