Bitcoin? Ethereum? It’s your future, take control.

Are cryptocurrencies worth the risk?

 

You’ve heard the hype, a one-way ticket to early retirement.  Cryptocurrencies such as Bitcoin, Ethereum and Ripple are quickly becoming the next big thing. So, what are you waiting for? It’s time to start trading the next craze, right?

Before you do it’s important to understand the risks. Analysis of prices indicate the market for cryptocurrencies is continuing to grow. Bitcoin, the most successful of these, rose more than 100% in 2016 and current trends indicate growth in 2017 should surpass this comfortably. It is worth noting, however, that similar price rises were occurring in the tech industry throughout the dot-com boom right up until its collapse in the early 2000s. At the time, investors were scrambling to ride the soaring prices attributed to the introduction of the internet to businesses. From 1995 to 2000 the NASDAQ, an index dominated by technology companies, rose from 1,000 to more than 5,000. When the markets eventually corrected themselves, investors saw colossal losses. It is possible a similar mechanism is creating unsustainable growth in the current cryptocurrency markets. In which, a feedback loop of speculative investments and price inflations are leading to rampant price increases. If this is the case, it is only a matter of time before these markets correct themselves and traders will see their profits wiped out spectacularly.

There is one investment option that is often overlooked by aspiring-investors, however. It is effectively risk-free and yet has the potential to create astonishing returns when compounded over a lifetime. Why spend time visiting news websites, internet forums or listening to the opinions of your know-it-all work colleagues attempting to predict the price movements of Bitcoin and Ethereum? You could instead put that time and energy into making an investment that has almost guaranteed returns, your personal development.

There are a huge range of endeavours that could help to increase your value as an employee. This may include studying for industry qualifications, completing online courses, volunteering, attending networking events, learning a language and more. A simple google search into such possibilities will reveal a whole host of things you might not ever have considered. By making full use of your time you can begin to build a strong case for that promotion you’ve been eyeing up or that new job you’ve been searching for. Accumulated over the span of your entire career, your earning potential could increase remarkably.

I understand the hype. Buying cryptocurrency is exciting and, if done properly, potentially very profitable. Everyone wants to make eye-watering returns and nobody wants to feel like they’re missing out. However, as anyone who has studied finance should know, when deciding on an investment, one should always choose the option that gives the highest rate of return at the lowest level of risk. So, why spend all your time and energy investing in the cryptocurrency markets when you could see a risk-free and effectively guaranteed return in your development and career prospects. Looking at it from this perspective, it’s a no-brainer.

 

By William Edwards,Vantage Point Consultant

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