On Bitcoin and Cryptocurrencies
Something I’ve been thinking about a lot recently, especially with all the recent headlines on bitcoin reaching all new highs. I mean, just head over here to see how crazy it is! Anyway, I’m not here to tell you why you should or should not invest in cryptocurrencies, or how they may or may not revolutionize our current financial system. Instead, let’s talk about the bigger picture.
I recently asked a friend if he still holds any bitcoin and told him that I’m considering buying some. He replied (slightly paraphrased) “I believe the correct term is HODL… and well, I can’t blame you for the FOMO but I’m not in the position to recommend anything.”
I didn’t realize it until then but FOMO just about sums it up. The reason why I suddenly want to buy bitcoins is that I’m afraid I’ll miss out. I’m afraid that cryptocurrencies might change everything we know and love (and hate) about our current financial system. What if bitcoin goes high and stays high? What if bitcoin becomes the next digital gold? What if cryptocurrencies end up replacing fiat money one day? What if I could make millions if I buy now, HODL forever, and watch its value soar? What if…
But the thing is, no one knows. Go do an online search right now and you’ll find tons of arguments for and against bitcoin. You might choose to believe one side over the other, you might think one side has a better argument than the other, but at the end of the day, no one can say for certain how the future will play out. So what if you miss out on this opportunity to be super-rich? So what if this is a historical turning point that ends up revolutionizing our monetary system? Aren’t you just going to carry on with your life anyway?
I know it’s tempting to just buy bitcoins right now without thinking, especially considering all the FOMO right now. But I think the smarter choice is to revisit your financial goals. Go back to the basics, what’s your current financial situation or portfolio like? How much risk are you willing to take and have you done your homework on how to buy bitcoins?
You don’t need to think too deeply about cryptocurrency as a technology or the potential future it may bring. Just think about yourself and what would make sense for you to do. If you want to buy bitcoins, and you have the financial means, and you don’t mind the potential risk of losing your money, then buy it just like you would any other investment. Otherwise, don’t.