Ep 165: Investing in Bitcoin or will it CRASH?

December 14th, 2017

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There's a lot of things that you can invest your money.

Back when I started investing in the stock market, it wasn't an investment that I knew that much about. I had to learn.

The reason I chose the market, instead of more on real estate or classic cars or coins or you look at rare stamps, is because I knew that business would be around for a while. Also, I wanted to see how businesses evolved. I was attracted to businesses, and I knew that business would have some staying power not to mention you could do it from anywhere.

If you go ahead and invest in real estate, for example, you can't do it from anywhere. So it had its pros and cons.

The thing for me was the longevity. I knew that it had time and if I learned how to do it, that's really where the big boys played. That's really where the big investing happened. It was a quick turnaround regarding you could get in and out of your trades reasonably fast, or you could also liquidate a large amount of stock reasonably quickly, and it was also regulated.

When you start looking at cryptocurrencies when you start looking at Bitcoin or many of the other currencies out there, they are a lot less regulated, and it's not an investment that I know.

Do I have people that I know and have heard about investing in rare stamps? Yes.

How about in rare paintings? Yes. I could have invested in a rare painting. Bought it for 13,000 sold it for 450 million dollars. Yes, it could have happened, but it didn't happen because it wasn't an investment I was interested in. It wasn't an investment that I knew that much about, and it wasn't the opportunity that presented itself.

Remember that opportunity presents itself when you have the experience. That's when you can capitalize on things. There are opportunities everywhere. You could go ahead and start your own business. You could go ahead and buy an expensive painting. You could go ahead and less than wine or start your own business. And, of course, you have digital currency. But for me, do I invest in it? No, because I don't know and understand the business well enough and I don't remember it well enough to the point of inputting a lot large portion of my money.

Could I go ahead and put $1,000, $10,000, $20,000, in it and see what happens?

Yes, I could do that, but now we get into speculation.

Where do you draw the line between speculating on something and investing in something?

When I look at stocks and my investments, I know that my return and a successive probability is let's say 10 out of 12 months, or 11 out of 12 months. Even if I have a lot of losing trades in one month, I know that more than likely I'll make it up on other trades in the future because I could hop around and go into other areas.

When it comes to digital currencies, I don't know that a track history that I can say hey this has a potential for me to make money. 11 out of 12 months or this has a possibility for me to have a 60% return on my investment over the next five or three years.

You could take a chance but from my perspective, taking chances when it comes to investing is just speculating, or it gets to the point of gambling. The risk to reward becomes less favorable.

When it comes to trading in the market or investing, you always want a better reward than the risk that you have.

When I used to do martial arts much more, so there was a gentleman that invested in real physical coins. I started researching this because it was around the same time that I got interested in the market as well. I was a lot younger and was attracted to the financial side of things. It drew me because he was driving around the Ferrari.

When you see this person's car, and I saw the person's car and driving it, and then you see him walk in he's trying to work out and get rid of the stress there. You look at all the social media accounts there that he has. It was legitimate.

Seeing him pulling up with a Ferrari and the stress that he had to come in to work out to get rid of that stress.

Dealing in that industry, he knew what he was doing. He knew what came about with it. He knew the risks associated with it, was I ready for that. No, it wasn't a business that I knew much about.

If you look at some of these rare coins and we start taking a look at some of these, you have a coin Explorer. When you begin evaluating this, you can see that this seated Liberty dollar 1870. As you start scrolling down and again, I don't know much about this, but as you start looking through some of the sheets and some of the things that have been selling, you could see here on the price point here was right around 805,000. There are one for four hundred and seventy thousand dollars for a coin or a block of coins or something to that effect.

As you start looking at trades investments and getting into things have to start wondering, do you want to go into these things? When don't you understand how the business works? If you take a look here at this cryptocurrency world, coin index and you start evaluating some of these things like a Bitcoin.

It continues to do quite well, and if you look at the chart, it's doing fantastic and phenomenal. But remember that everything has a pullback in marketplaces. It doesn't matter where you're at. The question is when are you going to be getting in it? You don't know if it's going to run for another five years, ten years, fifteen years and then crash. It could be one year and crash. You don't know.

How do you make money from it rather than just a one-time thing? Digital currencies are popping up all over the place, and you could do light coin here as well and put your money into that. It's all these currencies that continue to skyrocket, and the charts look impressive.

As you know in the marketplace, not everything will go up all the time.

You need to make sure that you're capitalizing and watching based on your risk. You're watching your risk to reward.

When you start looking into this, a lot of people that want to make a lot of money they do it in two different ways.

The first way is you want your thing to come in your ship. You're looking for a one-time occurrence, a one-time stock, a one-time whatever investment a Bitcoin. It could be a ruby deal, a diamond deal. They're looking for a one-time payout the lottery effect the lottery mindset.

If you have this kind of mindset, it's not a proper mindset to have because you're not building anything. You're not building a skill set, and you're looking for a one-time occurrence due to hype due to whatever. That's the lottery mindset.

The other approach is people who build assets who build their skill sets their education who learn to understand the risks the risk management, the risk to reward concept. When you do that, you're able to trade effectively.

If you build assets, you're building your connections. You're learning about marketing. You're building your product pipelines. You're building things within your business rather than let me make one product, and I'm going to make millions of dollars from that. That's not how a business operates. Business operates on building multiple products. iPhone 3 3GS, iPhone 4, iPhone 5, iPad, MacBook Pro - they continue to build more and more products.

That's what you need to start thinking about. You're trading, investing, looking at things. How well do you know and understand the investment? How well do you think you can profit on this on a consistent basis?

If you're looking for a one-time occurrence in a one-time event, you can do that. You might become very rich, and I'm happy for you. If you do but that's just speculation, and you may get lucky and more power to you. If you do and you might have a great life ahead of you.

But for the majority of people, it's not going to work out that way. That's not the way that wealth is built. It's not the way that riches are made. It's all come down to building a solid foundation. Building out your assets whether that's your skill sets, your mindsets. Building out all the tools that you need to do to make things work in the marketplace or your personal life.

Can you invest in it? Yeah but it's more along the lines of speculation.

Can you become rich from it? Absolutely.

How long will the run last? You never know. Depends how many more people pile on.

Can it crash? Yeah, it could crash anytime. You never know, and the same thing goes with the market, it could pullback any time.

But where can you be more consistent? What has longevity? What has staying power that's typically what I look at for my investments for my future growth on my money? I'd rather be a little safer than risky.

Again, a matter of risk to reward ratio and risk profile risk tolerance. If you love jumping out of airplanes, you enjoy a little more risky investments with your money and want to throw a thousand dollars and see what happens to Bitcoin. Maybe you'll triple your money. A thousand goes to 3,000, but what I really take a million dollars and put it in there and then perhaps it'll go to three million, that's great, but I wouldn't do it with ninety percent of my money.

If you had 50 million dollars, 100 million dollars and you're putting one million it in Bitcoin. Again, the same thing as for the average person, maybe throwing in a couple of hundred dollars, five hundred dollars, or a thousand dollars into Bitcoin and then seeing what happens.

But that's not typically how wealth is built.

If you're looking for that one time effect, it may happen to you, but the chances are that's not the way it works. In either case, if you are trading investing in Bitcoin, remember always take profits in the strength just as you would within the marketplace - trading stocks or anything else. Rare coins, stamps, gold framed art -doesn't matter what it is, and all things come back eventually regarding prices. They fluctuate. That's what investments are all about. But if you want to enjoy owning material pieces like framed art, you want to hang it, and it cost you 100 million dollars, and of course, you could do that. But as far as investing goes, remember you're looking for appreciation. You want to take those things slow and build it accordingly. You don't want to dump all your money in there because if they come back, things crash. If there are issues, it can hurt you financially.

Author: Sasha Evdakov

Sasha is the creator of the Tradersfly and Rise2Learn. He focuses on high-level education speaking at events, writing books, and publishing video courses on business development, internet marketing, finance, and personal growth.

I'm Sasha, an educational entrepreneur and a stock trader. In addition to running my own online businesses, I also enjoy trading stocks and helping the individual investor understand the stock market. Let me share with you some techniques & concepts that I used over the last 10+ years to give you that edge in the market. Learn More

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