Key takeaways
- A recent study, conducted by the financial company Edelman’s, showed that 25% of affluent millennials were investing in Bitcoin.
- The pull of trends like Bitcoin is reminiscent of other trends that popped up in the past—trends that failed to pan out, causing people to lose a lot of their hard earned money.
- Bitcoin, an early cryptocurrency, is now one of numerous different kinds of contracts available on the blockchain.
- Take care when considering investing your hard earned money in something that may or may not turn out to be a fad.
- Bitcoin may or may not stay around. There’s no way to know for sure. Remember you have access to traditional investing to grow your wealth over time.
In October 2018, Edelman’s, a financial company, conducted a survey of affluent millennials, which they defined as having $50,000 of accumulated assets, or making over $100,000 in annual income. The survey showed that 25% of them were investing in Bitcoin and this finding reminds me of other trends that occurred in the past.
For instance, there was a thing called Real Estate Limited Partnerships (RELPs) back in the ‘70s and early ‘80s, which basically amounted to a tax strategy. The problem was that the underlying real estate wasn’t any good. Consequently, RELPs those did not work well and the people involved were very unhappy with them as they didn’t pan out as expected.
Then, of course, the dot-coms came on the scene in the mid-to-late ‘90s and everyone knows that story. But to recap, the majority of those didn’t pan out and people ended up losing a lot of the money invested into them.
This brings us to Bitcoin. Bitcoin amounts to an early cryptocurrency on—what’s more important—the blockchain. Blockchain now has a wide array of different kinds of smart contracts. There are other things that come into play, but it’s hard to say whether or not Bitcoin will actually pan out. It has gone through very tumultuous ups and downs over the past year, and prior to that as well.
Maybe you’re wondering whether considering or not considering something like Bitcoin—which could potentially turn out to be a fad—is the right move. Maybe it isn’t a fad. You just can’t know, but it’s definitely one of those things you’ve got to approach with caution when investing. It may seem like the “next sure thing,” but there have always been things people said were the “next sure thing,” in many different sectors out there.
It’s about being wary and keeping an objective mind about what’s out there, what’s available, and what everyone’s buzzing about. Always take care to weigh these things against traditional investing through the various markets that are always available for investors to grow their wealth successfully over time.
This study showed that, for now, a large percentage of affluent millennials were following, and getting involved in, the currently hot trend of Bitcoin. Who knows what it’ll be in the next five or 10 years? Something new always comes up to get people excited and, perhaps, not thinking clearly. It may work, it may not work. Just be cautious about what you do with your hard earned money. Until next time, enjoy.
Gary