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Should You Buy Bitcoin? 3 Successful Investors Sound Off

Should You Buy Bitcoin? 3 Successful Investors Sound Off

One year ago, a single token of Bitcoin (CRYPTO:BTC) was valued at roughly $5,800. Today, it’s trading at approximately $57,600 per coin — up a staggering 877.5% across the stretch. 

With the cryptocurrency putting up incredible gains and potentially powering a lasting economic shift, three Motley Fool contributors weigh in on Bitcoin’s outlook. Read on to see whether they think the leading digital currency is a smart buy at this stage in the game. 

A Bitcoin logo.

Image source: Getty Images.

Keith Noonan: I’ve never been particularly bullish on Bitcoin and will readily admit that I’ve been completely wrong about its performance over the last year. Does that mean that I’m ready to get on board with the hot cryptocurrency? Nope. 

It’s certainly possible that Bitcoin will continue to put up stellar returns, and everyone who has seen big gains thus far should be thrilled and proud of their results. The cryptocurrency has performed spectacularly and stands as one of the best-performing asset of all time. That said, I won’t be purchasing Bitcoin any time soon because I struggle to understand the bull case for it. 

Is Bitcoin a practical currency or a value-storing asset? Is it a speculative investment that could continue to see massive valuation gains? In my experience, the bulls’ answers to these questions vary hugely depending on who you ask, when you ask, and how the question is framed. Bitcoin seems to be all things to all people, at least among the more hardcore adherents.

The Bitcoin phenomenon is super interesting, and perhaps it will continue to drive a real paradigm shift in finance. People really believe in it, and there’s value in that. At least for a time. 

With thousands of other cryptocurrencies already on the market and more getting in on the game each day, I just don’t see the comparative value in Bitcoin’s open source blockchain technology, particularly when other cryptocurrencies offer faster transaction times and lower processing fees.

Bitcoin is a brand. At this moment, it’s an incredibly popular brand, but I’m not satisfied with explanations for why the cryptocurrency should or will become more valuable.

James Brumley: This is a question that merits a clear definition of the word “buy.” If you’re talking about taking advantage of short-term swings in the cryptocurrency prices, I’m not an advocate of speculative trading, but certainly it’s possible. If you’re instead talking about taking a long-term stake in bitcoin as you would a blue chip stock or a commodity, that’s a hard “no” due to one glaring risk: There is no limit to the supply of them, wrecking the whole supply-versus-demand thing necessary to create price stability.

Yes, the number of bitcoins that can ever be mined is finite. Bitcoin isn’t the only crypto out there, though. Dogecoin (CRYPTO:DOGE), Ethereum (CRYPTO:ETH), Litecoin (CRYPTO:LTC), and Cardano (CRYPTO:ADA) are others that came after Bitcoin, and more are sure to follow.

It matters.

See, money (fiat currency issued and managed by a central bank) works because its supply is controlled with economic stability in mind. You can exchange it for foreign currency, but currency exchange merely swaps money. It doesn’t create it. Not so with cryptocurrency. Bitcoin’s lofty value is predicated on it being the world’s preferred crypto. If it becomes too expensive or too unpredictable, buyers and sellers can choose to move to a newer — and cheaper — cryptocurrency, and then another, and then another.

The bubble hasn’t popped yet, but I fear a bunch of Bitcoin owners buying into a premise will end up suffering once the world collectively realizes the potential number of competing cryptocurrencies is infinite.

David Butler: Obviously it would be a fallacy to say that you cannot make any money from cryptocurrencies. You can! I own a very, VERY small position in the Grayscale Bitcoin Trust (OTC:GBTC), but this is more akin to gambling than investing. There is an inherently high level of risk involved, as pointed out above. In all, the biggest thing that I think investors and traders need to keep in mind is that the further this goes, the more world governments will feel compelled to act. 

Anyone who truly believes that these internet-controlled cryptocurrencies like Bitcoin will ever become a comparable and useable alternative to the U.S. dollar is being a bit naive. Things like crypto may very well serve as an artificially created hedge against inflation, and a relatively useless digital commodity, and it does seem that some tech firms will try to let it be used for transactions. But at the end of the day, no government is going to allow their currency to play second fiddle to something as completely speculative as Bitcoin. If things get out of hand, you’ll see government regulation. If that happens, there’s the potential to watch something like Bitcoin’s value in terms of U.S. dollars collapse. 

If businesses start allowing cryptocurrencies to be used to carry out transactions, I think that will be the catalyst that finally causes government action. The ability to convert money into crypto, and then carry out transactions, creates a whole host of national security issues. It also creates a potential avenue for moving cash out of the country, by converting it into something that isn’t a trackable government currency.

Once you start seeing that stuff, and I think we will in the near future, cryptocurrencies are going to start taking some serious scrutiny from government. 

Source: www.fool.com

Author: Keith Noonan, James Brumley, and David Butler


Bitcoin ATMs are coming to a gas station near you

Bitcoin ATMs are coming to a gas station near you

By Imani Moise and Anna Irrera

(Reuters) – A new feature has appeared at smoke shops in Montana, gas stations in the Carolinas and delis in far-flung corners of New York City: a brightly-lit bitcoin ATM, where customers can buy or sell digital currency, and sometimes extract hard cash.

The machines have multiplied quickly through the United States over the past year, fueled by a frenzy in crypto trading that sent bitcoin prices over $58,000.

Kiosk operators such as CoinFlip and Coin Cloud have installed thousands of ATMs, scouring areas competitors have not yet reached, executives told Reuters.

“I just assumed there was demand and people wanted bitcoin everywhere,” said Quad Coin founder Mark Shoiket, who flew to Montana after scanning a U.S. map for bitcoin ATM deserts.

During a week-long road trip, he found seven places to install machines, including 406 Glass, a store in Billings, Montana, that sells tobacco, vape juice and colorful glass pipes.

As of January, there were 28,185 bitcoin ATMs in the United States, according to howmanybitcoinatms.com, an independent research site. Roughly 10,000 came within the prior five months.

Bitcoin’s growing popularity has been the primary driver for new installations.

The reasons people use ATMs rather than transacting online vary. Some get paid in cash, some lack bank accounts, some want to send remittances abroad or want anonymity, while others feel more comfortable interacting with a physical machine.

Rebecca White, a 51-year-old bitcoin investor who lives in the Pittsburgh area, makes larger investments online and uses bitcoin ATMs when her family has extra money.

“When we do our grocery shopping and we have $60 left, I will stop at the bitcoin ATM,” said White, who works in the nuclear power industry.

Some machines only offer bitcoin, while others let customers invest in various digital currencies. Few bitcoin ATMs can actually spit out cash, and they cost more than regular ATMs or transacting online.

Fees range from 6% to 20% of a total transaction, said Pamela Clegg, director of financial investigations and education at cryptocurrency compliance firm CipherTrace. Fees vary depending on the location and Bitcoin ATM operator.

“The growth of the ATM market – it is not even a gentle increase, it is almost a 45% increase,” said Clegg. “The growth is quite astonishing.”

Government agencies have raised red flags about some machines because of their cost and the potential for illicit activity. The New Jersey State Commission of Investigation detailed some of those concerns in a February report titled “Scams, Suspicious Transactions and Questionable Practices at Cryptocurrency Kiosks.”

None of those concerns have stopped the industry’s growth.

COAST TO COAST

There are now bitcoin ATMs in every state except Alaska, as well as in Washington, D.C., according to an online map by Coin ATM Radar. Reuters journalists spotted recent additions at gas stations, stores and restaurants in North Carolina, South Carolina, rural Pennsylvania and the outskirts of New Jersey and New York City.

Las Vegas-based Coin Cloud has 1,470 machines around the United States and expects to have 10,000 by year-end, said CEO Chris McAlary. Although there were concerns that the pandemic might hurt business, foot traffic actually rose during lockdowns.

“We expected the worst as Covid hit, but stimulus payments came out and that helped quite a bit,” McAlary said. “Some people took stimulus and bought digital currency with it.”

Chicago-based competitor CoinFlip grew its ATM footprint from around 420 last year to 1,800 now, said CEO Daniel Polotsky. Transactions per ATM nearly tripled during that period.

“There are people who don’t have bank accounts or don’t like to use them,” Polotsky said.

CoinFlip charges customers 6.99% to buy crypto and 4.99% to sell, he said.

Atlanta-based Bitcoin Depot similarly grew its number of ATMs from 500 to more than 1,800 machines over the past year, said CEO Brandon Mintz. Most customers are 25-40 years old and find machines by searching online, he said.

General Bytes, which manufactures bitcoin ATMs, temporarily ran out of stock last summer as demand soared. The company sold 3,000 machines last year, 90% of which went to North America, said founder Karel Kyovsky.

Not every ATM draws lines of customers.

Quad Coin’s Shoiket removed a handful of the 200 ATMs he installed last year because they had not turned a profit within six months.

At Grassy Point Bar & Grill in Broad Channel, New York, an employee had to plug in a bitcoin ATM for a Reuters journalist to see how it worked.

And only a handful of truck drivers have stopped by the Pioneer Auto Museum in Murdo, South Dakota, to use a Coin Cloud machine installed five months ago, said owner Vivian Sonder.

Coin Cloud offered her $200 a month to house the machine, and periodically sends maintenance people to check on it from Rapid City, 140 miles away.

“I didn’t understand why they wanted to put one here,” said Sonder. “It’s a seasonal business in a town with less than 500 people.”

(Reporting by Imani Moise and Anna Irrera; Additional reporting by Suzanne Barlyn; Editing by Lauren Tara LaCapra and Nick Zieminski)

Source: news.yahoo.com


Here's Why Bitcoin Isn't Right for Me

Here’s Why Bitcoin Isn’t Right for Me

When we think about the hottest investments of 2021, it’s easy to land on Bitcoin (CRYPTO:BTC), whose value has soared over the past few months in particular. But while a lot of people I know are eager to jump on the Bitcoin wagon, I’m staying away. Here’s why.

Let’s be clear — I know what Bitcoin is. It’s a digital currency that’s becoming more widely accepted as an alternative to actual cash. But I don’t fully understand how it’s mined and why it’s so limited in quantity, despite my very tech-savvy husband explaining it several times over.

One rule I like to follow with my money is to never invest in something I don’t understand. There was a time, for example, when I didn’t quite get how REITs (real estate investment trusts) worked, so I read up on them until I had more clarity. I’ve tried learning more about Bitcoin but there are still aspects of it that confuse me, and so I don’t think it’s the right place for my money.

Closeup of woman with nervous expression biting nails

Image source: Getty Images.

Furthermore, I frequently hear Bitcoin enthusiasts liken it to gold. But I just don’t get that comparison. Gold is a physical commodity. Bitcoin isn’t. Gold has been around forever. Bitcoin has not. I understand gold, and I may or may not decide to invest in it. I just don’t fully understand bitcoin, and that alone makes it a poor choice for me.

My investing strategy largely involves buying stocks that offer exceptional value or growth potential. I also own some bonds and REITs because they serve as diverse income sources. Bitcoin, frankly, just doesn’t fit nicely for me into that mix. And while it’s easy to make the case that Bitcoin could, in time, grow in value (as it’s already proven capable of), I’m just not confident in that.

What cryptocurrency will become the main one in a year?
BitcoinEthereum

Whenever I decide whether a company’s stock should have a place in my portfolio, I take a look at its assets, cash flow, and other financial data to determine where it’s going. But Bitcoin isn’t a company — it’s a type of currency, and so I can’t perform the same analysis I normally would.

The extent to which Bitcoin gains value will hinge heavily on how widely it’s adopted and how heavily it’s regulated. Both of these things are up in the air. While some will argue that stocks are a risky investment in their own right, to me, Bitcoin is more volatile.

One of the most important things to do as an investor is build a portfolio you’re comfortable with and confident in. If I were to buy Bitcoin, I wouldn’t manage to satisfy either criteria. To me, it’s important to have investments that don’t keep me awake at night, and I can’t say that Bitcoin fits that bill. And while I know that there’s plenty of opportunity there, right now, I’m opting to stay away from Bitcoin and put my money to work elsewhere.

To be clear, Bitcoin may be a great choice for someone who has a different investing strategy than mine or who understands it better. And I may change my mind about it. But for now, I’m just not there yet.

Source: www.fool.com

Author: Maurie Backman


Valkyrie Hopes to Launch 'Innovative Balance Sheet ETF' Backed by Companies Exposed to Bitcoin – Finance Bitcoin News

Valkyrie Hopes to Launch ‘Innovative Balance Sheet ETF’ Backed by Companies Exposed to Bitcoin – Finance Bitcoin News

At the end of January, the Texas-based firm Valkyrie Digital Assets filed an exchange-traded fund (ETF) registration for the “Valkyrie Bitcoin Trust” with the U.S. Securities and Exchange Commission (SEC). This month, the cryptocurrency investment manager announced it has filed a prospectus for an ETF with the SEC based on companies that hold the leading crypto asset bitcoin.

Bitcoin (BTC) has grown quite a lot in value in 2021 and two months ago, Valkyrie Digital Assets joined the rest of the companies aiming to launch a U.S.-based bitcoin ETF. The struggle to approve a bitcoin ETF in the United States has been real, but the recent approval of three Canadian ETFs gives people hope. Now according to a recent registration statement from Valkyrie Digital Assets, the company plans to launch another ETF based on companies that hold bitcoin (BTC) in their treasuries.

The ETF is quite similar to the filed prospectus with the SEC issued by the financial incumbent JP Morgan Chase, which is also a basket of firms exposed to bitcoin (BTC). However, Valkyrie’s registration filing for the ETF does not name any firms it plans to list. The fund, if approved, will be called the “Valkyrie Innovative Balance Sheet ETF.”

“The fund is an actively-managed exchange-traded fund that will invest principally in the securities of operating companies that have innovative balance sheets, which the Fund’s investment adviser, KKM Financial LLC (the “Adviser”), considers to be operating companies that directly or indirectly invest in, transact in, or otherwise have exposure to bitcoin or operate in the bitcoin ecosystem,” the Valkyrie ETF filing notes.

Valkyrie says the company could also invest in “bitcoin trading platforms, bitcoin miners, bitcoin custodians, digital wallet providers, companies that facilitate payments in bitcoin, and companies that provide other technology, equipment or services to companies operating in the bitcoin ecosystem.”

Companies like Microstrategy that hold bitcoin (BTC) on their balance sheets could also be considered. The Valkyrie prospectus adds:

The fund may invest in companies that invest in or have any portion of their assets accounted for by direct bitcoin holdings. The fund may invest in companies of any market capitalization. As of the date of this prospectus, the fund expects to invest a significant portion (i.e. more than 25%) of its assets in securities of companies in the information technology sector.

The “Valkyrie Innovative Balance Sheet ETF” comes at a time when bitcoin (BTC) has touched another all-time price (ATH) reaching $61,782 per unit on March 13. Additionally, there are now 42 companies holding BTC in treasuries capturing around $82 billion in value. Of course, like most SEC prospectus filings the Valkyrie registration mentions the risk involved with bitcoin and blockchain exposure.

“The technology supporting the bitcoin ecosystem is new. The risks associated with owning bitcoin or operating in the bitcoin ecosystem, therefore, may not be fully known until the ecosystem matures,” Valkyrie’s SEC filing notes.

What do you think about Valkyrie’s latest ETF filing that invests in companies with exposure to bitcoin? Let us know what you think about this subject in the comments section below.

Balance Sheet, Bitcoin, Bitcoin (BTC), BTC, companies bitcoin, ETF, exchange traded fund, Finance, SEC filing, SEC prospectus, Treasuries, Valkyrie, Valkyrie Digital Assets

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Source: news.bitcoin.com

Author: Finance

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Should You Buy Bitcoin? 3 Successful Investors Sound Off

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