BREAKING NEWS MSDH reports 1,025 new coronavirus cases, 18 new deaths Wednesday Full Story
WEATHER AUTHORITY : Heat Advisory View Alerts

So, why shouldn't I buy Bitcoin?

I can't help thinking about the money I could have made if I bought bitcoin a few years ago. Why shouldn't I buy ...

Posted: Jan 25, 2018 7:59 PM
Updated: Jan 25, 2018 7:59 PM

I can't help thinking about the money I could have made if I bought bitcoin a few years ago. Why shouldn't I buy some now?

You're certainly not the only person with a major fear of missing out on cryptocurrency.

The buzz is real. The prices of bitcoin, ethereum, and litecoin, are skyrocketing. Kodak is planning to launch a "photo-centric cyrptocurrency." You can now trade bitcoin futures, buy exchange-traded funds (ETFs) focused on blockchain technology, and even invest a self-directed IRA in a variety of cryptocurrencies.

(Blockchain, if you don't know, is the technology behind bitcoin that records all transactions made with cryptocurrencies.)

If you bought $1,000 of bitcoin three years ago, it would be worth about $39,000 today. That would have been nice.

"But that's a scary way to think about your investments," said Adam Grealish, senior quantitative researcher at Betterment.

Related Bitcoin bounces back

It's much more important to think about how the investment will do in the future, rather than how it did in the past, he said. And it's more difficult to put a value on bitcoin's future than that of a more conventional investment.

So, is it worth it to dip your toes into bitcoin? It certainly depends on your financial situation. But here are three reasons why it's generally not a good idea.

1. It's 'almost' like playing the lottery

Your chances of seeing a big payout from buying bitcoin "is almost lottery ticket-like," said Grealish.

You could also think of buying bitcoin the same way an angel investor thinks about investing in a start-up, he said. They hope it will be successful, but there are a ton of unknowns. Most of the time angel investors expect to lose money, but the payout is big if one actually performs as promised.

"You have to be OK with losing everything," he said.

Related: I'm 23. How do I start investing?

2. It's difficult to put a value on bitcoin's future

Bitcoin is a currency, not a company. So there are no cash flows to analyze or financial reports to review when deciding to invest. That's one of the reasons it's more risky than buying a company's stock.

Those who believe in its value are betting that it will become widely adopted as a new way money is exchanged, Grealish said.

It's hard to know if that will happen. While several companies are trying to attach themselves to the bitcoin surge, the future doesn't look completely rosy. Wall Street banks have warned that trading bitcoin futures could be dangerous. And Stripe, an early advocate for bitcoin, will stop processing transactions in April because of its wild volatility.

Even if cryptocurrencies prove valuable, there's a chance bitcoin won't survive and another coin will -- and you could have picked the wrong one.

"This is a very nascent field pushed up by speculation. We urge an incredible amount of caution," Grealish said.

3. There's probably a better place you could put those dollars

So you've heard the warnings. But you still want to put a little play money into bitcoin.

Northwestern Mutual CFP Chantel Bonneau says that for many people, the money could be invested or saved in a better place. That could be an emergency savings fund, maxing out a 401(k) to receive your full company match, or taking advantage of the tax benefits offered by an IRA.

Related: Robinhood trading app introduces cryptocurrency

"So unless you have infinite dollars, you're giving up some to a very risky, speculative investment, that could be allocated to another financial position," Bonneau said.

Even if your finances are in perfect shape, remember that you'll be in for a wild ride. It can be mentally stressful to deal with all the volatility we've seen from bitcoin.

"Just because something is not that exciting doesn't mean it's not a great approach," Bonneau said.

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 37542

Reported Deaths: 1272
CountyConfirmedDeaths
Hinds310258
DeSoto205020
Madison156039
Jones125450
Harrison123116
Rankin117320
Forrest107143
Neshoba105077
Lauderdale97581
Scott83715
Jackson80919
Washington78214
Copiah69016
Leake65120
Lee64023
Grenada63412
Oktibbeha63228
Lamar6127
Warren61222
Holmes60842
Wayne57519
Yazoo5747
Leflore56956
Lowndes55317
Lincoln54136
Pike52821
Lafayette5274
Sunflower5269
Monroe47239
Panola4696
Covington4665
Simpson4613
Bolivar42818
Tate41813
Attala39024
Pontotoc3906
Adams38820
Newton37910
Marion35612
Claiborne31811
Pearl River31732
Marshall3074
Winston30513
Chickasaw30419
Jasper2956
Walthall2899
Noxubee2819
Clay26811
Smith26112
Union25811
Coahoma2376
Clarke23425
Lawrence2182
Yalobusha2089
Tallahatchie2064
Montgomery1903
Carroll18911
Kemper18414
Humphreys17810
Calhoun1765
Hancock15813
Itawamba1528
Tippah15111
Jefferson1353
Webster13511
George1313
Jefferson Davis1294
Prentiss1294
Tunica1273
Amite1183
Greene11810
Alcorn1132
Tishomingo1111
Quitman1041
Wilkinson1049
Perry954
Stone802
Choctaw764
Franklin582
Sharkey520
Benton490
Issaquena111
Unassigned00

Alabama Coronavirus Cases

Confirmed Cases: 58225

Reported Deaths: 1183
CountyConfirmedDeaths
Jefferson7186174
Mobile5206147
Montgomery4690114
Tuscaloosa277754
Madison27299
Marshall209012
Shelby182026
Lee171637
Morgan14296
Baldwin139611
Walker112635
DeKalb11187
Etowah110414
Elmore110124
Dallas102810
Franklin96016
Unassigned81428
Russell7340
Autauga73317
Chambers69332
Limestone6914
Cullman6896
Houston6587
Butler65631
St. Clair6463
Tallapoosa64669
Lauderdale6337
Colbert5826
Calhoun5776
Escambia5228
Lowndes49723
Pike4915
Jackson4722
Coffee4534
Covington43913
Talladega4337
Dale4142
Barbour4133
Bullock38010
Hale36723
Marengo36411
Chilton3563
Blount3441
Marion33214
Clarke3296
Wilcox3258
Winston3157
Sumter30413
Pickens2806
Randolph27910
Monroe2773
Perry2632
Conecuh2478
Bibb2322
Macon2279
Choctaw22112
Greene2019
Henry1613
Washington1588
Lawrence1510
Crenshaw1403
Cherokee1357
Geneva1060
Lamar951
Clay922
Fayette902
Coosa691
Cleburne531
Out of AL00
Tupelo
Clear
95° wxIcon
Hi: 94° Lo: 76°
Feels Like: 105°
Columbus
Broken Clouds
86° wxIcon
Hi: 94° Lo: 73°
Feels Like: 94°
Oxford
Few Clouds
84° wxIcon
Hi: 92° Lo: 74°
Feels Like: 91°
Starkville
Scattered Clouds
90° wxIcon
Hi: 91° Lo: 71°
Feels Like: 98°
WTVA Radar
WTVA Temperatures
WTVA Severe Weather