Last year, it was hard to turn on your computer without reading about the dramatic rise in cryptocurrency values, or seeing advertisements for ways that you, too, could participate in this get-rich-quick opportunity to buy virtual money that is backed by no government on Earth.
It’s almost always the case that when an investment becomes wildly popular and experiences a dramatic runup in price, that is exactly the wrong time to invest. And it turns out that cryptocurrencies were no exception.
While the stock markets were dropping moderately in value, in the last week of March cryptocurrencies lost their owners an estimated $60 billion, including a $20 billion drop over one dramatic six-hour period. Bitcoins are trading below $7,000, and the trend is taking them toward their February 6 low—and perhaps further. In case you’re not up on other cryptocurrencies, there’s something called Ether (now $381 per coin); Bitcoin cash ($691.48); Litecoin ($116.27) and Ripple (49 cents).
The problem, as always, is figuring out whether these alternative currencies are actual investments. For now, there are very few stores which accept them as actual money. Bitcoin’s primary purpose in the marketplace has famously been to enable drug and weapons traffickers to buy and sell without leaving a paper trail for international police agencies to follow. Chances are, those markets are not of much interest to you or your portfolio, so it might be wise let this crytpo-mania play itself out while you watch from the sidelines.
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