There’s been a lot of talk about Wall Street’s wild ride recently, and Bitcoin is another investment creating a lot of buzz. The cryptocurrency that was worth just a few dollars years ago is now soaring to prices in the tens of thousands of dollars, making many early buyers millionaires.
While many people have heard of Bitcoin, a lot of them may not really understand what it is. It’s not a physical coin. When people say they’re buying Bitcoin, they’re actually buying a digital currency that can be exchanged over the internet without a bank.
For years, many people let their bitcoins sit in their virtual wallets. The cryptocurrency slowly grew in value and recently exploded, hitting new highs. One reason for the recent surge — more investors are starting to buy Bitcoin as an asset, much like gold.
“So the reason you’re hearing about it a lot is because there is a lot of demand for it,” said Taylor Tepper, investing and retirement analyst at Forbes Advisor. “So as the prices rise, people become more and more interested. People start thinking, ‘Am I missing out? Is this something I should do? Can I get rich quick?’”
But Bitcoin is not a get rich quick scheme. It’s taken years for it to hit the current record highs. Some analysts predict the price of Bitcoin could see another surge, and even triple the highs it’s now seeing. However, Tepper warns that Bitcoin is extremely volatile and not something to build retirement on.
“I think there’s just a lot of mojo around it … the price is going up, it has this potential to be this revolutionary technology,” said Tepper. “But when it comes time to actually plan out your future, it is something that should be viewed as a speculative bet as opposed to one that you can really rely on.”
You don’t need tens of thousands of dollars to buy Bitcoin. You can buy a fraction of a coin and watch it grow, even with just a few hundred dollars. No matter how much money you spend, Tepper warns, “You should go into that with every pretense of ‘this money could be worth nothing tomorrow.’ So that is money that you can afford to lose.”
If you do want to buy Bitcoin to spend, a lot of major companies are beginning to accept cryptocurrency as payment. Microsoft, Paypal and even Overstock for example. And Bitcoin isn’t the only cryptocurrency out there, it’s just the one leading the pack right now.
Read more:Bitcoin Buzz! Is It Too Late to Get In?