There can be no doubt that 2017 is the year of cryptomania. Every day more and more investors, especially young earners want to try their luck with Bitcoin, Ethereum, Litecoin and any other crypto coin they can get their hands on. Cryptomania 2017 is fantastic to watch as it unfolds, but dear bitcoin and altcoin investors, would you consider slowing down for a moment to look at your asset allocation?
How to buy Bitcoins in India? If you have asked this question, wondered how to invest in Bitcoins with INR, here is a simple DIY approach. This is not a recommendation to buy bitcoins and I do not hold any. The reason I am writing this is that the bitcoin and cryptocurrency community is filled with unsavoury pump and dump characters who can easily fool and misguide new investors. So I think it is is better for interested new investors to DIY their bitcoin buying.
This post is a response to a question posed to me by a PhD student: Everyone seems to be predicting that price of Bitcoin will increase by a lot in the coming years and it will become popular. So should I buy some (accumulate) now?
To answer this, let us discuss the economics surrounding bitcoins or cryptocurrencies in general. This is my 4th Bitcoin post. Previous posts are:
Suppose you wish to “put” some money in cryptocurrency (or cryptocoins), say Bitcoin, altcoin, litecoin, fartcoin etc. would you trade or would you invest? It is obvious that due to poor liquidity, the crypto market is volatile. So instinct would tell us caution is necessary. So trading (frequent buying and selling) with regular profit booking seems like an obvious choice to make some quick money rather than investing (buy and hold with periodic investing). In this post, I discuss the fundamental difference between the currency market and capital markets and if something can be discerned about cryptocoin risks.
As I sat down to write a post on “cryptocurrencies: should you trade or invest in them?”, I received an email from my classmate asking me to explain if the most popular cryptocurrency- the bitcoin is a Ponzi scheme? A pyramid scheme? or bubble? Since the two topics are closely related, I thought let me do my best to address this question.
If you are new to cryptocurrencies, try this first: Bitcoin: Should we use it as a currency or as an investment?