Bitcoin nears $10k: Why I’m NOT investing in Bitcoin (The Truth)

What's up you guys? It's Graham here. So, as you're watching this right now, just know I am safe and sound in a bunker somewhere in the middle of nowhere, safe from all of the inevitable dislikes and extreme comments I'm gonna get on this video. Because every single time I talk about Bitcoin or cryptocurrency, it's like I'm talking about religion or politics. People are so divided on the subject, either really for it or really against it.

Now, frankly, I'm somewhere right in the middle. I don't really have an opinion either way. I'm pretty neutral about it all, but all the time I get asked why I'm not investing in cryptocurrency. This video is gonna be explaining my thought process about cryptocurrency, Bitcoin, and why I have not invested yet.

Now, again, just to get this out of the way, I'm pretty much completely neutral on my stance on Bitcoin and cryptocurrency. I do not have a strong opinion either way. I've been following Bitcoin since about 2011, maybe 2010, when it was being traded on the Silk Road. Back then, one Bitcoin equaled one dollar.

Now, in addition to that, I've also been following other coins like Ethereum, Litecoin, Neo, and some other little things here and there over the past year and a half, so I've been watching these pretty closely, but I've yet to jump in. Now, it's really easy to look back at this in hindsight and say I should have bought this at this price and sold it at that price, and I would have made X amount of money. But in reality, life never actually works this way.

Now, I see a lot of potential in the blockchain technology and everything it has to offer, and the doors that's gonna open up for a lot of different industries. But right now, the biggest difference I see is that the value of a lot of these cryptocurrencies is strongly driven by speculation versus actual utility. This, to me, means that there's no real reason why Bitcoin is trading at almost $10,000 a coin as opposed to $5,000 a coin, just besides the promise that it's going to be adopted on a much larger scale and that one day it's gonna be worth even more than $10,000 a coin.

And here's where it actually gets really interesting. The more attention Bitcoin gets, the higher the price tends to climb. The higher the price tends to climb, the more people want to invest into it. The more people that want to invest into it, other people see this and also want to invest into it, which means that this creates almost like a social network effect, that the more people that are adopting this, the more value Bitcoin actually has because more people are using it, and the more the price will begin to stabilize.

Think of something like YouTube, for instance. If only one person is watching YouTube and uploading videos, it has pretty much no value whatsoever. But if a billion other people are also using it, then all of a sudden it has value. The value really comes from the network-like effect that YouTube has created, and that's when it's actually worth something.

So, in this regard, speculation and cryptocurrency is actually necessary for it to stabilize and grow on a much larger scale. People have to take a risk on this, and they're rewarded really handsomely if it pays off. And in order for this to stabilize to a point where speculation doesn't drive the market, it has to be seen as a normalized currency on a very large scale.

The value of Bitcoin, from how I see it, is entirely dependent on how many people are using it. But this is where I see it getting a little bit complicated and difficult for me to articulate and explain. Well, I think Bitcoin does have a strong intrinsic value, and I love the technology behind it, and I would love to see this adopted on a larger scale. I wonder how much of Bitcoin's value right now is driven by hype and speculation versus how much value it really has right now for the amount of people that are actually using it, and this is what I've yet to really figure out and why I've been a little bit hesitant about investing in this.

Now, I know a lot of people that compare gold to Bitcoin, and this is a good point. Older generations have seen gold as a store of value in a hedge against inflation, just as younger generations today see Bitcoin as a deflationary decentralized currency that they could store their wealth in. In a sense, they're right about that. I could see this trend continuing, but if we're comparing Bitcoin to gold, I think it's worth mentioning that when the dollar went off the gold standard in 1979, gold was heavily speculated and surged in price for the few years following that event before it went down in value and eventually stabilized.

This makes me think: could we be in the same speculative run-up like gold saw? If we're comparing Bitcoin to gold, this also gets me thinking: how big will Bitcoin get before government intervention? If enough companies begin adopting Bitcoin and accepting it as payment, at some point the government is going to need to get involved to try to tax it. To me, that seems nearly impossible for the government to ever be able to regulate Bitcoin on a large scale like that.

Things keep going as they're going right now; eventually, you should be able to buy a house in Bitcoin, buy groceries with Bitcoin, buy a car with Bitcoin, buy anything with Bitcoin. And at some point, the government is going to want to step in to make sure you're paying taxes on all the gains that you're having. And then that lends the question: even if they are able to do it, how is it going to be taxed? It's gonna be long-term capital gains? Is it gonna be seen as income? How are they ever gonna know how much money you have in Bitcoin or ever trace any of it? A lot of these things seem so far-fetched to me that the government is ever going to be able to control or regulate it, but I think they will try.

I just see something happening at some point when the government is gonna want to get involved. But the one thing I believe pretty firmly is that the physical currency of actually having paper money and coins in your hand is gonna be a thing of the past. I can't imagine how, in 20 or 30 years from now, we're still gonna have physical currency that we're gonna be spending. For me, at least, I rarely ever use physical money; everything is done over credit cards and online.

So, I think just adopting a digital currency to begin with is a good thing, whether it be Bitcoin or something else. So, overall, this makes me a little bit uncertain about the long-term outlook of cryptocurrency. What's gonna happen? With all the investments I make, I like to make the investment for life. All the properties I bought, I bought them with the intention of never selling them. Same thing with the stocks I bought; I buy those index funds with the intention of really never selling them.

So, at the end of the day, when it comes time for me to decide where to invest my money, I have to think of how much I'm willing to make for the risk I'm willing to take to make that money. And just to give you some examples, I nearly doubled my initial investment on the property I bought this year. I almost tripled my initial investment on the property I bought last year.

So if I decide to invest in Bitcoin at the price right now, it is about $9,000 a coin. It would have to get to $18,000 a coin for me to get the same return that I got in real estate this year. So when I think of the amount of risk I'm willing to take in Bitcoin versus the almost certainty I feel investing in real estate, I choose this safer measure of real estate.

Now, Bitcoin could very well go up to $30,000, and maybe I would have made a better investment in Bitcoin. But I get it; I totally get it. In hindsight, I should have taken my two hundred and twenty thousand dollars and instead of buying a property, I should have put it all in Bitcoin. Had I done that, I would have nine hundred and thirty thousand dollars today. That's way better than investing in real estate and nearly doubling my initial investment.

I understand that this is all in hindsight. This is all looking back at what had happened. Maybe it could have turned out differently, but for me, it's just a decision of risk versus reward, and to me, the reward isn't quite worth the risk.

Now, like I said, it's easy to look back and be like, “Here's where I jumped. How did I just invest in this? Everything would be set. I'd be worth a hundred million dollars!” Done! Had I just done that! Again, it's all hindsight. You don't know this. The outcome could have very well turned out to be a lot different than it is today.

This is why I've yet to invest in cryptocurrency, and this is why I continue to put my money in real estate instead. Now, going forward, I see a lot of potential in Bitcoin, cryptocurrency, and the technology behind it. What I like most about all this is that it got a lot of young people interested in investing like I've never seen before.

This is something where now I feel like kids almost don't care about stocks anymore because stocks are like what old people are doing. But cryptocurrency is like this really youthful generation that's kind of pumping it up, that's interested in investing, and I've never seen that before on such a large scale.

I'm also seeing people that never would have invested in their lives, who never would have put a dollar in the stock market, but who are now obsessed with trading cryptocurrencies, that are watching the markets, that are reading the charts, that see every news article that comes out to try to speculate the market. Like, these are people that I had never seen invest before that now have a passion for investing.

These are people that, instead of spending money, now they want to put more money in cryptocurrency because they believe in it, they're into it, and all of a sudden, they're investors now. And I think that is phenomenal in and of itself.

But I feel like with any market, with risk comes reward. I feel like just as though it spiked to almost $10,000 a coin, I feel like it's so volatile that it could very well lose 50% of its value with really no reason whatsoever, other than investors get panicked, a wrong news article comes out, maybe a bad rumor appears out of nowhere. I feel like it's so volatile at this moment that you could very well lose a significant portion of your money, which is also why I've yet to invest.

And especially when this market is driven by rumors, news, and speculation, just make sure to invest what you can afford to lose. For me, I'm pretty risk-averse. I'd rather take this slow and steady approach than try to put all my money in crypto to, like, try to triple it in the next few months. That's just not really my style, and I'd rather take something that I feel a lot more confident about than just jump into something because everyone else is doing it.

So that's it! Those are my thoughts. That's why I haven't invested quite yet, and that's why I preferred real estate so far. This might change at some point, it probably will. At probably some point, I'm gonna be putting my money in crypto. It's just, as of right now, this is why I've held off.

And again, I'm safe somewhere; you guys don't have to worry about me from all the, you know, crazy comments probably down below. Every time I make a video about cryptocurrency, you might have disliked it. Saying it are insane! The comments I get are insane! So don't worry, you guys, I am safe.

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Thank you again for watching, and until next time. [Music]