Topic: Is bitcoin a risky investment? (Read 3126 times)

Bitcoin has a natural market in places like Silk Road and that won't go away.  So the coins will always have value. As knowledge that you can get heroin for resale without having to pledge your left testicle spreads, we can expect that value to be higher than Bitcoin is worth today.  If you put your cash in a savings account here in the UK, you actually get a negative return so Bitcoin is not so risky.

Bitcoin is my first and only investment. I've never understood stocks enough to put money in them but with bitcoin I genuinely believe in it. Which has compelled me to invest in it.

Almost every article published to date that covers the topic of bitcoin as an investment takes it as a given that bitcoin is a risky investment.  "Only invest what you can afford to lose" is a common sentiment even on the bitcoin forum.

Although I agree that bitcoin should/can be considered a risky investment depending on the context, I submit that a small bitcoin investment is actually a conservative/risk lowering investment for most US investors.  This conclusion is reached when you consider the full context and diversification of the average investment portfolio in the US.  It looks a little something like this: stocks, bonds, real estate, cash and cash equivalents, and precious metals, typically in that order based on the relative weight of the investment.  Note that all of these assets are directly linked to US dollars other than precious metals and real estate.  If we make the assumption that diversification lowers risk, it also makes sense that the average US investment portfolio should not be overly weighted towards US dollar denominated assets.  Sure the US dollar is the world's reserve currency and therefore has a "low-risk" tag currently associated with it, but that doesn't mean it makes sense to have almost all investment assets directly tied to the US dollar.  Proper diversification includes diversificatoin into other asset classes, including non-flationary currencies such as bitcoin.  Considering the potential that non-government backed crypto-currencies have to disrupt the monetary system, even if one believes that the probability is small of a wide scale disruption, it still makes sense to have some assets (i.e. bitcoin) that would benefit from such a disruption.  

I'll admit that bitcoin fits the classic definition of a riskly investment.  However, I would argue that for an investor that currently has a high allocation of stocks and bonds, an investment in bitcoin would actually lower risk for the complete portfolio rather than raise it as it is commonly assumed.

Therefore, I no longer think it is appropriate to broadly classify bitcoin as a "risky investment" to US investors.  It is certainly not a non-risky investment, but all such labels should be taken in the context of a given investors full investment portfolio.  

I think bitcoin will fall in 1 year time. Ripple is coming.

no, just dont look at the charts

I think bitcoin will fall in 1 year time. Ripple is coming.

I have 90% of my assets in bitcoin.

And no, I don't think it is risky. Quite the opposite in fact.

I think Bitcoin is the best investment opportunity I have ever seen.  If you see one that's better, let me know - I'd be very surprised.

...I doubt major companies such as google would want to get involved with digital currency...

Bitcoin is NOT an investment, and it would be much better if nobody sees it as such.

Almost every article published to date that covers the topic of bitcoin as an investment takes it as a given that bitcoin is a risky investment.  "Only invest what you can afford to lose" is a common sentiment even on the bitcoin forum.

Although I agree that bitcoin should/can be considered a risky investment depending on the context, I submit that a small bitcoin investment is actually a conservative/risk lowering investment for most US investors.  This conclusion is reached when you consider the full context and diversification of the average investment portfolio in the US.  It looks a little something like this: stocks, bonds, real estate, cash and cash equivalents, and precious metals, typically in that order based on the relative weight of the investment.  Note that all of these assets are directly linked to US dollars other than precious metals and real estate.  If we make the assumption that diversification lowers risk, it also makes sense that the average US investment portfolio should not be overly weighted towards US dollar denominated assets.  Sure the US dollar is the world's reserve currency and therefore has a "low-risk" tag currently associated with it, but that doesn't mean it makes sense to have almost all investment assets directly tied to the US dollar.  Proper diversification includes diversificatoin into other asset classes, including non-flationary currencies such as bitcoin.  Considering the potential that non-government backed crypto-currencies have to disrupt the monetary system, even if one believes that the probability is small of a wide scale disruption, it still makes sense to have some assets (i.e. bitcoin) that would benefit from such a disruption.  

I'll admit that bitcoin fits the classic definition of a riskly investment.  However, I would argue that for an investor that currently has a high allocation of stocks and bonds, an investment in bitcoin would actually lower risk for the complete portfolio rather than raise it as it is commonly assumed.

Therefore, I no longer think it is appropriate to broadly classify bitcoin as a "risky investment" to US investors.  It is certainly not a non-risky investment, but all such labels should be taken in the context of a given investors full investment portfolio.