Here is the Best Way to Invest in Bitcoin According to an Expert
Bitcoin is that ‘thing’ we all love to hate. We don’t understand it, yet, many of us are making a fortune from it.
This year, Bitcoin has gone from under $1000 to more than $16,000 as shown. It has surprised many people, including some of the brightest people in the country like Jamie Dimon, the CEO of JP Morgan who calls it stupid.
Bitcoin has many supporters and many critics. Proponents believe that it will one day replace fiat currency while critics call it a bubble.
So far, the supporters seem to be winning the case. Still, many people are finding it difficult to invest in Bitcoin. They ask, ‘What if I buy it today, and it collapses tomorrow?’
Every day, I receive emails from people asking me on the best way to invest in Bitcoin. Frankly, I don’t have a right answer. In fact, the rise of Bitcoin has taught us how little we know about money, finance, and investing.
In my research, I found one expert who came up with a genius method of investing in Bitcoin. His name is Parke Shall, who advised readers to buy one Bitcoin and forget it.
Parke Shall is an experienced analyst and investor who works for a family office called Orange Peel Investments (OPI). Parke has researched and published hundreds of articles on stocks and investing. He has also studied Bitcoin for years.
In his readings, Parke Shall found two groups of people. The first group were the Bitcoin optimists. These were people like former hedge fund manager, James Altucher, who expects Bitcoin to reach $1 million by 2020.
The other group were the Bitcoin bears like Wall Street Journal who argued that Bitcoin was headed to zero. They believe that Bitcoin is like stocks during the dot-com bubble or the tulip mania that happened 400 years ago.
Parke’s advice was to take the middle ground.
Today, one Bitcoin is worth $16,000. So, if you buy one Bitcoin today, it will cost you the $16,000. If the latter group that sees Bitcoin headed to zero wins, your maximum loss will be the $16,000. Nothing more.
On the other hand, if the first group wins and Bitcoin reach $1 million by 2020, your return will be more than 6,000%.
At the time Parke shared his idea, Bitcoin was trading at $1,400 which means that people who bought it and forgot have seen their value go up by $3,400. So far, not a bad result.
Another reason he recommended buying Bitcoin is in its relationship with gold. Investors buy gold as an insurance. Its price accelerates when there is more tension in the world. In such time, Bitcoin is a better currency than the dollar.
To many investors, Bitcoin is just like gold. It is unregulated, and it cannot be tracked. For example, when you buy a gold bar, no authority can track you. And, most governments hold their foreign reserves in gold.
His advice did not end at buying Bitcoin. He recommended that you buy and forget it. As in, you buy one and assume that you have just lost your money.
This is very important because Bitcoin tends to see huge swings in prices. For example, it started the week at $10,000, and by Friday, it was at $16,000. Last week, when it passed $10,000, it fell came back to under $9,500 within hours.
Therefore, if you buy Bitcoin and continue monitoring its price, you might be tempted to sell it. This is what happened to my friend who was determined to buying and forgetting Ethereum; Bitcoin’s poorer cousin. He purchased one Ethereum at $87 and sold it the moment it hit $350. If he had held on to his Ethereum, it would be worth almost $500.
Conclusion
Note that Parke recommended that you buy one Bitcoin. The reason for this was to recognize the risks involved in Bitcoin. Like any investment that you make, there are risks involved.
If buying one Bitcoin for $16,000 is so high for you, you can use companies like Coinbase and CEX to buy a part of the Bitcoin.
