Bitcoin price: Should you invest in bitcoin? Expert Mr Money Moustache says NO
BITCOIN prices crashed to a January low following a massive sell-off in the markets, just a day after a popular finance advisor urged potential investors to avoid the cryptocurrency like wildfire.
Bitcoin, Ripple and Ethereum all fell casualty to a spontaneous token sell-off, triggered by news of Asian regulators looking to ban crypto trade.
Bitcoin’s BTC token fell as much as £856.15 ($1,180) in the space of an hour, between 7.14am and 8.34am, to an all-month low of £8,857.44 ($12,207.90).
Matt Greenspan, analyst at eToro, attributed the harsh drop to declining trade volume in the far East.
He said: "The volumes have been declining steadily both in Japan and South Korea over the last few days.
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"This morning, the combined volume from these two top crypto trading countries dropped below 30%. Looks like they're tired of overpaying for cryptos and waiting for the market to even out."
The crypto crash comes off the back of popular finance advisor Mr Money Moustache warning against the “collective insanity” of crypto trading.
Financial blogger Peter Adeney, who operates under the Mr Money Moustache moniker, argued bitcoin is not a viable investment option.
He claims bitcoin’s price is driven entirely by speculation which is ultimately harmful to investors.
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Mr Adeney said: “You should not invest in Bitcoin. The reason why is that it’s not an investment; just as gold, tulip bulbs, Beanie Babies, and rare baseball cards are also not investments.
You should not invest in Bitcoin. The reason why is that it’s not an investment
“These are all things that people have bought in the past, driving them to absurd prices, not because they did anything useful or produced money or had social value, but solely because people thought they could sell them on to someone else for more money in the future.”
Mr Money Moustache added bitcoin’s value is entirely made up and stuck in a bubble of its own making.
Bitcoin fell by 12 percent during the plunge today, ending a two day rally which put back some wind in investors’ sails.
As of 9.26am, BTC is over 65 percent down on it’s all-time record high of £14,507.80 ($20,000) which it reached in December.
Steven Maijoor, chairman of the European Securities and Markets Authority, joined the chorale of analysts warning against bitcoin.
He told investors to be “prepared to lose all their money” because bitcoin’s volatility undermines it use as a currency.
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Mr Adeney now says a speculative currency like bitcoin only works when it is cashed out for fiat money like the US dollar.
He added: “When the supply of foolish speculators dries up the value evaporates – often very quickly.
“Finally, nothing becomes a good investment just because ‘it’s been going up in price lately’.”
