Bitcoin has performed extremely well in 2017, up more than 200% year-to-date as I write this. Even more significantly, the digital currency is becoming more widely accepted around the world. So, it may seem like a good idea to buy some bitcoin while it’s still in the early stages as part of your retirement investing strategy.
Is bitcoin in a bubble, or is it just getting started?
Just before I wrote this article, bitcoin traded above $3,000 for the first time, with this latest leg up mainly fueled by high demand from Asian investors.
There are some who say that bitcoin could now be in a bubble. For example, billionaire Mark Cuban recently said that the digital currency is in a bubble and that it’s headed for a correction. “When everyone is bragging about how easy they are making (money) = bubble,” Cuban said on Twitter. “Everyone always thinks that this time is different…”
However, Cuban also emphasized that he’s not saying bitcoin is worthless. The underlying blockchain technology, Cuban says, is very valuable and will be in widespread use in the future. “I’m not questioning value. I’m questioning valuation,” said Cuban.
On the other hand, there’s also a good case to be made that bitcoin could potentially go much higher. As I wrote in a recent article, it’s possible for bitcoin to rise to $1 million under the right circumstances — specifically, if the currency gets widespread mainstream acceptance and becomes a major player in the global currency market. To be clear, I don’t think it’s particularly likely to get anywhere near that amount, but it’s certainly possible.
Don’t be blinded by bitcoin’s potential
Here’s the main point of this discussion. Just because something has the potential for massive growth doesn’t make it a good investment, especially for retirement.
When it comes to retirement investing, slow and steady is the way to go. You want stocks and bonds…