What is Bitcoin? Dipping my toe in cryptocurrency investments.

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What is investing in Bitcoin all about? I’ve been doing my best to learn about, and understand, the crypto currency world and I have to admit, it hasn’t been easy.  Usually, the more I read about and research something, the clearer it becomes.  I haven’t found that to be the case with Crypto.  Could be that I’m just too old, or dumb, to get my arms around it.  There’s a lot of cool names and terms occupying the crypto world.  Names like Bitcoin, Blockchain, Etherium, Ripple and Coinbase and terms like mining and forks, which add an exploration and adventurer mystique to the whole thing.  I’ve reached the point where I can now provide a layman’s definition for each of these, but I’m still not able to confidently put it all together into an explanation of how the whole thing works.

People I don’t know, but pay attention to, like James Altucher and Peter Thiel and a lot of others, are exceptionally bullish on crypto, particularly Bitcoin.  I’ve heard people predict that its price per coin could reach $1MM in the next decade.  On the flip side, JP Morgan’s Jamie Dimon is widely attributed with calling it a fraud (I’m not sure whether he really believes that or not – I heard on a podcast that JPM has more than a hundred people working on Blockchain / Bitcoin….by the way, is everything on a podcast believable like everything on the internet is?). Whatever you believe, the fact is that in 2017, Bitcoin ran up from few hundred dollars to nearly $20,000 before falling off to about $14k by the end of the year.  It’s hard to ignore that.  It’s also hard to ignore the common sense that says if you don’t understand it, you probably should stay away.

So, what to do?  I’d been pitched on investing in crypto funds managed by crypto experts (if there is such a thing yet) that had huge minimum investment levels (like $200k and up).  I can’t make sense of that, not yet and maybe not ever.  I don’t feel, though, that sitting this one out on the sidelines makes much sense either.  I feel like if I stay engaged, keep paying attention, and get in the crypto game, with a small, make that very small, bet, that makes the most sense.

I made that small bet recently by buying 2 (yes you’re reading that number right – I told you it was small) units of Bitcoin Investment Fund, symbol GBTC, though my Schwab Account.  It’s run by a New York form called Grayscale, www.grayscale.com, (they look legit and the marketing deck was fancy and confusing, so they probably know what they’re doing….) and is the first “publicly quoted” (which they asterisk * with a note that says “publicly quoted on OTCQX [which means over the counter and isn’t the most comforting place to be] under the alternative reporting standard).  But hey, I’m in now and “the-not-quite-sure-but-I-think” owner of ~.18 of a Bitcoin.  I lost $85 of value the first day 🙂 — but at least I’ve joined the adventure.


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Mike Malatesta

Mike Malatesta

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