Many people consider bitcoin a bubble or even a fraud. Jamie Dimon, CEO of JP Morgan Chase, said in October 2017 that " if you're 'stupid' enough to buy bitcoin, you'll pay the price one day." He also declared publicly that he would fire any JP Morgan Chase employee involved in bitcoin trading. Although he changed his opinion on bitcoin this year, another famous investor, Warren Buffett, declared recently that bitcoin wouldn't end well.
Lawrence Baxter, a law professor at Duke University, also advised people not to buy bitcoinin an article published by The Wall Street Journal. One reason he gives is that "bitcoin is on a collision course with sovereign states... At the first serious (and likely coordinated) move by governments to regulate or bank the digital currency, bitcoin will crash to zero."
However, despite the high price of bitcoin, there are still some people who believe bitcoin has more room to grow. John McAfee, the eccentric founder of McAfee, an antivirus software company, is bitcoin's most vocal supporter. This July, he predicted that bitcoin will reach $500,000 in 3 years or he’d eat a NSFW piece of himself. He just upped his own predication recently by declaring that bitcoin will reach $1 million by 2020.
In the spirit of full disclosure, I do not invest in bitcoin personally, nor do I invest in bitcoin on behalf of any clients. I always remember what Warren Buffett said, "Be fearful when others are greedy. Be greedy when others are fearful."
Some clients have asked me recently if they should invest in bitcoin, my advice to them and to any of you is the same:
Don't mortgage your house, or borrow from your retirement or your children's college savings, in order to invest in bitcoin. If you have extra money, make sure all these priorities in your life are funded first.
If you really, really can't resist, only invest the amount of money that you can afford to lose and you won't lose sleep at night.
Before you invest, you should learn as much as you can about bitcoin and especially understand any possible downside riks. Coindesk provides some well written articles on "bitcoin 101," including a fun piece on how to explain bitcoin to a five-year old.
Back up your bitcoin digital keys in multiple devices so you don't lose them. Remember, if you lose your bitcoin keys, you will lose access to your bitcoin forever.