(WFLA) – In order to understand if Bitcoin and other cryptocurrencies are a wise investment for your personal situation, you must first have a pretty good handle on what it all means.
Bitcoin is the most popular and expensive of the cryptocurrencies.
Bitcoin and all the other crypto coins, aren’t coins at all, but investment vehicles and platforms of technology.
For instance, money can be sent with nothing more than an address on a computer.
That transaction hits the blockchain, which is simply a distributed ledger.
The technical details of a transactions are made public.
Why is this so earth shattering? There’s no middle man, no bank, no third party. And beyond that, you can invest in these “coins.”
Some investors have made millions. But some have also lost their money in a flash.
News Channel 8’s Josh Benson asked some people around the Tampa Bay area if they’ve considered investing in Bitcoin and other cryptocurrencies.
“No way,” one man said firmly.
“I’m not, but I have a lot of friends that are,” said another.
We wondered if most people have even heard of Bitcoin?
“I have,” said a woman having lunch. “But I don’t know much about it.
This was a common answer.
But fortunes have been made, and lost, with cryptocurrency. It’s all thanks to swings in the cryptocurrency markets we’ve never seen before.
“If I want to send you money, I have the ability of doing that by an address, a Bitcoin address from my account to your account,” said Avani Desai, a cryptocurrency investor.
Desai helps big companies outline their cyber-security plans for Tampa-based Schellman & Company, so she obviously knows tech very well.
Desai learned about Bitcoin back in 2008, so she was way ahead of the game. She believes blockchain is the next wave of technology for almost all industries.
“I don’t need any of the banks, I don’t need a middleman. I don’t need a PayPal account or anything like that to do it,” she said. “ And that’s scary to some organizations. It’s change, but it’s radical change.”
That could be why we reached out to six financial advisers for this story and they all gave the same answer: “I can’t talk about it!”
So who could advise on Bitcoin and cryptocurrency? There was one last hope.
Jim Cramer hosts Mad Money on CNBC. He’s prohibited from investing personally, so he can advise all he wants.
We asked Cramer what his initial reaction was to the words “Bitcoin” and “cryptocurrency.”
“Ah, roulette. Double zero. Red, black, ah, game of chance,” he said. “I like to invest. I don’t like games of chance. I don’t think they’re investable.”
While he frowns on Bitcoin and cryptocurrency, he agrees with Desai that blockchain is taking hold.
“It’s a frictionless way to do financial trades, so I think absolutely, blockchain is very for real,” he said.
As far as investing?
“Do I think there’s still money to be made? Yes,” said Desai. “But there are also 1500 other alt coins out there that you have the ability to get 2, 3, 4,000 dollar profits as well.”
Alt-coins are cheaper. They all serve a different purpose from a technology perspective. But you could get into some for pennies a share.
Desai invests in alt-coins and says the markets change daily, if not hourly. She’s so dedicated to following the markets she’s created her own app called My Crypto Alert. That way she’s alerted when something happens and she’s not constantly on her phone checking prices.
As far as any investing in cryptocurrency, Cramer has a different approach.
“A lot of people come up to me and say, ‘Jim, Bitcoin.’ I go back, ‘Boeing,’” he said. “Now Boeing is the best performing stock in the last two years, and they laugh at me. Meanwhile, Boeing has doubled. I don’t think Bitcoin is going to double from here. I just don’t!”
Whether you’re intrigued, invested or in over your head, Bitcoin, blockchain and cryptocurrency aren’t going anywhere for now.
The question is…will you be in?
“Bitcoin, are you kidding me? I mean c’mon!” said Cramer. “But you know what? There’s a sucker born every minute.”
“I know it’s something I want to look more into and learn a little bit more about,” said one woman from Tampa.
“Is this the end of Bitcoin? Is this the end of cryptocurrency? I think we’re just starting,” said Desai.
Desai has some tips if you’re a first-time investor in cryptocurrency. She says:
Never invest more than you’re able to lose in say, Las Vegas.
Each alt-coin has a white-paper. You should learn about their technology.
Continue to follow updates from the company. Invest your interest and time into their mission and track their growth.
If you’re someone who agrees more with Cramer and like traditional investing, he didn’t leave you out.
He says there is a stock that may be perfect to invest in and it’s related to Bitcoin (but it’s NOT cryptocurrency).
You can learn more about his…