This is how to buy Bitcoin, but realize it could be one giant bubble

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A BitcoinThis video is for people who are curious and it’s not an endorsement of any particular coin or service.
I do not recommend that people risk their money in cryptocurrencies, but I have been experimenting personally.
One of the most enduring features of the crypto-space is the periodic crash, which comes without any warning.
By Josh Brown

https://www.cnbc.com/video/2017/12/07/josh-brown-explain-how-to-buy-bitcoin.html

A lot of people are talking about cryptocurrencies these days, probably because they’ve gone so much higher this year.

The most important thing to remind ourselves is that anything to do with bitcoin or ethereum right now is pure speculation. Prices are rising because there is a finite supply and people are betting that other people are going to buy at higher prices later. There are zero fundamentals involved because these digital assets produce no cash flows, like a stock or a bond.

Whether or not cryptocurrencies represent the future of commerce or are just in a giant bubble, people are curious about how they can experiment.

I do not recommend that people risk their money in cryptocurrencies, but I have been experimenting personally, just to learn and see for myself what it’s all about. This video is for people who are curious and it’s not an endorsement of any particular coin or service.

Okay, with that disclaimer, I’ll tell you a little bit about how I’ve been doing my research.

I chose to use Coinbase.com to buy my first bitcoin this July. It’s a brokerage and handles storage for people who want to buy and sell digital assets.

To get started, I created a login and an account. I was then prompted to link a bank account, which took 48 hours to establish. I was able to execute my first purchase, locking in my price immediately, although it took almost a week before the money was transferred in from my bank and the coin purchase showed up on the screen.

The first thing you’ll see when you log in is a dashboard. It defaults to showing you Bitcoin’s recent price activity, although you can toggle over to see prices of Ethereum and Litecoin, the other two digital assets Coinbase currently allows you to buy and sell.

Below, you’ll see the holdings in your account.

The buy/sell page is where you place an order. It looks like an online stock brokerage page, and that’s probably not an accident. You have the option of buying fractional amounts of cryptocurrency. You don’t have to buy one whole coin at a time. I believe that this has sped adoption among young speculators first starting out with lower dollar figures.

You can also see that there is an option to place a fixed dollar amount at a specified interval. For example, you can have the same dollar amount move into your account daily, weekly, biweekly or monthly, making an automatic purchase regardless of price. It’s sort of like dollar cost averaging.

The most popular news source for all things crypto is called Coindesk. Coindesk has set itself up to be something like the Wall Street Journal for digital assets. The news coverage goes on throughout the day, written by analysts and journalists who cover the space.

It is, of course, highly biased toward being bullish on crypto in general so it’s important to take everything you read with a grain of salt.

Let me remind everyone that so far, Bitcoin has had a parabolic rise and has turned into something of a mania, and there is no reason to think that this could go on uninterrupted. In fact, one of the most enduring features of the crypto-space is the periodic crash, which comes without any warning, even though all of the crashes have led to higher prices so far.

Storage and custody is another tricky issue, with hacks of these exchanges having occurred on a regular basis. For that reason, many players have been taking their digital coins off of the exchanges and storing them on a chip that is not connected to the internet.

Timing a mania or a bubble is very difficult, so my attitude is to expect that every dollar I experiment with could be lost.

The world of cryptocurrencies is both exciting and fraught with danger, volatility and the chance of theft. It’s very early right now and anyone experimenting should do so with eyes wide open and a high risk tolerance.

CNBC

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One response to “This is how to buy Bitcoin, but realize it could be one giant bubble”

  1. PatienceTew Avatar
    PatienceTew

    Whoooweeeee… I just can’t wait!!

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