🚀 Should you buy Bitcoin now it's on the way up?
Plus 🔸 US stocks are doing well 🔸 China's ghost city 🔸 the London stock exchange keeps falling over 🔸 and Grand Theft Auto VI leaked 🔸
Hello! Here’s today’s two-minute guide to demystifying money and making you richer.
Yesterday’s markets:
S&P 500: ⬆️ 0.6% … ⬆️ 19.37% YTD.
FTSE 100: ⬇️ 0.2% … ⬇️ 0.56% YTD
USD to GBP: $1.26 ⬆️ 4.14% YTD
EUR to GBP: 1.17 ⬆️ 3.23% YTD
Bitcoin just went above $42,000. Should you buy some now it’s on the way up?
Bitcoin’s price chart for this year.
Your most annoying friend — that crypto guy, you know the one — has just become even more annoying because crypto is booming. Suddenly every conversation begins with “I told you so!”
Bitcoin broke through $42,000 per coin this week and it’s up 147% for the year. Those gains are way more than stocks. Suddenly, crypto looks tempting.
Should you buy some?
Eeeesh. Difficult question. Let’s start with the obvious caveat:
Only an absolute moron puts all their money in crypto. Only invest in crypto if you can afford to lose everything you put in.
Having said that …
Let’s look at why Bitcoin is rising
A new “Bitcoin halving” is coming up. The reward for mining will be cut in half some time in 2024, making new Bitcoin harder to generate — and that’s putting upward pressure on prices.
Traditional platforms are coming in, boosting demand. Companies like Fidelity, Blackrock and Schwab have started offering crypto exchange-traded funds, which you can buy like mutual funds on most trading sites. Investors no longer need to figure out how a blockchain wallet works, basically.
There is very little Bitcoin for sale. 70% of the total supply of bitcoin hasn’t moved in the last year. Lower supply means higher prices.
Bitcoin is well below its all-time high of $64,000. BTC has been there once. It could go back again, right?
Now let’s look at the downside
You might be the dumb money. 83% of bitcoin holders will make a profit if they sell now. You may be too late to enjoy the rest of this rally if the current holders of bitcoin regard buyers like you as the newly arrived dumb money.
A lot of the good news — summarised above — is already priced in.
Bitcoin is based on nothing. Always worth repeating: Bitcoin may be the oldest cryptocurrency but it’s still just a bunch of code and software that you can't really use in real life unless you’re trying to avoid remittance fees when you send money to Nigeria or Argentina.
A lot of people lose everything when they invest in crypto. The market is filled with scams and hacks and criminality. Even safe coins like BTC can go into terrifying nosedives.
So if you’re feeling lucky and you want to ride this wave … do so in moderation. Do NOT bet all your money on crypto. Maybe just a little bit.
In the long run, people who get rich — and stay rich — tend to have their money in stocks and property and they keep it there for years. Crypto is a get-rich-quick scheme and it relies on newbies to enter the market when it’s too late. So we really mean it when we say: Don’t put any money into crypto unless you’d be OK with seeing it all go to zero. If you’re fine with that have some fun. But regard it as a fun experiment, not your financial plan for the future.
And for dessert …
🎉 US stocks are within striking distance of their all-time highs.
🌴 China built a massive city near the beach … but no one wants to live there. Check out the “creepy” photos of Forest City.
🏦 The London Stock Exchange suffered two outages that stopped trading for two hours on Tuesday. That’s the third stoppage since October.
🚓 What’s inside Grand Theft Auto VI. Sneak peek here.
🇮🇱 Israel says it is investigating whether some short-sellers had advance knowledge of the October 7 Hamas attack. Yikes.