Should I buy Bitcoin? Martin Lewis warns of scams

Martin Lewis has published advice for anyone considering investing in Bitcoin.

A viewer asked the MoneySavingExpert on his live ITV show should you invest in Bitcoin.

It comes as the value of the cryptocurrency has recently risen to highlights of nearly £ 30,000.

But Martin urged the public to be careful, as Bitcoin is a highly volatile form of investment.

News Shopper: Martin Lewis was talking to Alex in London during his ITV showMartin Lewis was talking to Alex in London during his ITV show

Speaking on The Martin Lewis Money Show, he said: “Bitcoin is set up as a currency – a non-government currency – so you’re supposed to be able to spend it, but I’m assuming you’re thinking of this not spending but more as an investment, and that’s what most people look at.

“First of all, is it safe?

“Well, some people have lost money in their wallets.

“Like gold it can be stolen, and cryptocurrency is a bit like the equivalent of gold in that it’s a store of what people put in.

“You have to be very careful.”

What is Bitcoin and how does Bitcoin work?

Bitcoin, often described as cryptocurrency, virtual currency or digital currency – is a form of currency that is completely virtual.

It’s like an online version of cash. You can use it to buy products and services, but not many stores accept Bitcoin yet and some countries have banned it altogether.

Novelty is the physical Bitcoins you see in pictures.

They would be worthless without the private codes printed inside them.

News Shopper: Bitcoin, often described as cryptocurrency, virtual currency or digital currencyBitcoin, often described as cryptocurrency, virtual currency or digital currency

Essentially, every Bitcoin is a computer file stored in a ‘digital wallet’ app on a smartphone or computer.

People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people.

Every single transaction is recorded in a public list called the blockchain.

This makes it possible to trace the history of Bitcoins to prevent people from spending coins they don’t own, making copies or undoing transactions.

There are three main ways that people get Bitcoins:

  • You can buy Bitcoins using ‘real’ money
  • You can sell stuff and let people pay you Bitcoins
  • Or they can be created using a computer

Can I make money investing in Bitcoin?

Although the value of Bitcoin has recently increased to around £ 30,000, its value is very volatile and has dropped to as low as around £ 300 in the past – so you should not invest unless you can afford to lose the cash.

Martin added: “Is it for nothing – I’m not talking about investing.

“The thing about investing – and Bitcoin is an investment – is that prices are rising and prices are falling. With Bitcoin, they’re rising tremendously and they’re falling tremendously.

“And the reason for stressing so much is that you can make a fortune, but you may lose a fortune.

“So if you can’t afford to lose the money you put in, then don’t invest in it.

“It’s a gamble, like all kinds of stocks and shares, and all kinds of investing and investing in gold.

“That’s your choice, but if you do it the right way the investment should work for you, but it doesn’t mean you won’t lose money nonetheless.”