Betting the Ranch on Bitcoin
Betting the Ranch on Bitcoin is a Bad Bet. Mark Cuban Explains it All.
The latest round of jaw-dropping Bitcoin news circulating all over the news the past 48 hours; people mortgaging their homes to Bitcoin. So when I say betting the ranch on bitcoin I’m not just using a figure of speech. Previously I wrote about many Bitcoin investors tightening their belt, cutting their expenses and plowing every extra penny into Bitcoin. Eating rice and beans instead of steak and lobster so you can put that extra money into Bitcoin makes sense. Risking the roof over your head doesn’t.
Betting the ranch on bitcoin doesn’t stop there. This article in Fortune talks about bitcoin investors maxing out their credit cards to buy Bitcoin too. That’s nearly as risky in the long term but could be viable in a very short-term play of one month. As long as you pay off your balance when your credit card statement arrives you could make a profit this way — until the next Bitcoin dip. This kind of timing of the market is ill-advised.
Mark Cuban has been quoted as saying you should only invest as much in Bitcoin as you are prepared to lose. He definitely would not advocate betting the ranch in bitcoin. Or credit card balances. Or your child’s college fund. While it might be tempting to go “all in” on Bitcoin due to its spectacular gains and meteoric rise in price, you still need to be aware that this could change at anytime. Hypothetically, Bitcoin could plunge by 25% or even more — and never recover fully. The results could be catastrophic. We’re talking life changing in the worst possible way.
While aggressively investing in Bitcoin could be a very successful strategy, don’t go betting the ranch on Bitcoin. You could find yourself homeless. Treat Bitcoin like any investment, Investments of any kind are not guaranteed. Neither is Bitcoin,