Forget Mega Millions and Powerball, some people are getting rich this new year by buying Bitcoin. The digital currency is red hot.
But before you try it, we have a buyer’s watch story to share so you don’t waste your money.
Bitcoin ran up from $ 20,000 in December to $ 40,000 by January 10, making big money for investors. But then, it dropped by 20%, burning off investors who arrived late for the party.
Fortune Magazine reported that Bitcoin is a bubble that has popped many times, most recently in March 2020 when it plummeted by 60%.
Jim Cramer of CNBC said Bitcoin can be part of your investments and said he owns some, but he recommends you just play what you can afford to lose, just like gambling .
Think about what can happen when a bubble bursts.
Most young investors may not remember the 1999 dot-com bubble when any stock with dot-com finally doubled in days.
It all collapsed in the dot-com bust, and late investors lost a fortune. The poster child was Pets.com.
Bank of America calls Bitcoin the “mother of all bubbles,” so invest accordingly. It’s not a scam and you could make big money, but you could lose big money too.
Could Bitcoin soon double or triple again? Sure, but it could also dive as it has many times before.