With the rise of companies like Coinbase and GDAX, buying Bitcoin, Etherum and Litecoin (which is the cryptocurrency that has been going bananas over the last 4 days) is a lot easier. And everyone wants in. Even people who can’t afford to buy it.
According to securities regulator Joseph Borg, people aren’t just betting their savings on cryptocurrency, they are betting their house too.
“We’ve seen mortgages being taken out to buy bitcoin. … People do credit cards, equity lines,” said Borg, president of the North American Securities Administrators Association, a voluntary organization devoted to investor protection. Borg is also director of the Alabama Securities Commission.
“This is not something a guy who’s making $100,000 a year, who’s got a mortgage and two kids in college ought to be invested in.”
Most people hear your warning, Joe, but I do not think anyone is going to heed it. We’re Americans for Christ’s sake, we piss away billions of dollars every year gambling at casinos, on sports and playing the lottery. What makes you think we are going to start learning about the stuff we’re investing in before we invest a whole hell of a lot of money into it? Be better, Joe.
Now that there are places to buy and sell cryptocurrencies with scary ease, I suspect prices will continue to rise for several of these more established currencies before any kind of bubble popping occurs. But I am not an expert in cryptocurrency. What I am (sort of) an expert in is human behavior and from what I have learned about 90% of the population is if you give us a chance to gamble on something smart or stupid, we will. You can count on that.
But seriously, if you are seeing all this explosive growth and thinking about opening an account, take Mark Cuban’s advice and never risk more than you can afford to lose. You never know when bull markets will turn into bears and you don’t want to lose your shirt or things with far more value.