Is Bitcoin Going to Keep Moving Higher?

Bitcoin has had a remarkable run over the past year or so. Even after a recent pullback, the leading cryptocurrency is still up by nearly 400% since the beginning of 2020.

Should investors buy more to benefit from even more potential upside? Or is bitcoin too volatile and too expensive to invest in? In this Jan. 11 Fool Live video clip, Fool.com contributor Matt Frankel, CFP, and Industry Focus: Financials host Jason Moser respond to a viewer’s question about investing in bitcoin before its price stabilizes.

Matt Frankel: Let me read this one from Mary real quick. She said, “Matt, I didn’t realize you had mined Bitcoin, new respect.” Thanks, Mary. “If you wait until Bitcoin actually stabilizes, would that be too late to really profit in the game? Thanks.”

First of all, when I mined, it was a fun experience. I bought some of the mining hardware and didn’t just use my computer like you could back to the day, and a little thing called an AntMiner. I had another few that were just like little USB, things that plugged into a USB port. They were just like little computers. My power bill went through the roof a few months I was doing that.

Jason Moser: [laughs] I can imagine.

Frankel: Yeah, those suck a lot of power, all the mining hardware. I can just imagine that — add five years of sophistication to that. I can imagine how much it sucks today. But waiting till Bitcoin stabilizes, yeah, it might be too late. For all we know, Bitcoin could stabilize at $100,000. I mean it’s entirely possible. I don’t think Bitcoin is an investment to chase profits. It’s a speculative lottery ticket at this point. There are people who make solid cases that Bitcoin could go to zero eventually. There are people who make solid cases that Bitcoin could go to a million dollars eventually. It’s very speculative right now. If you want to eventually use it as a store value or as a currency, then wait till it stabilizes. If you’re planning to speculate on it and trying to make money, then buy some now, and hold on tight for a roller coaster ride.

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Moser: Yeah.

Frankel: There is nothing wrong with doing that if know that’s what you’re getting into. There’s nothing wrong with speculating a little bit if you know that you’re buying a lottery ticket essentially. But if you want to use it, which it sounds like Mary likes the utility of it, then I would wait till it stabilizes before I bought some as a store of value or anything like that.


View more information: https://www.fool.com/investing/2021/01/21/is-bitcoin-going-to-keep-moving-higher/

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