Absurdly risky. It’s all the risks of investing in ForEx, plus a ton of other risks.
You’re better off heading to Vegas and putting it all on black.
It’s very hard to guess what would happen in the future, but, generally in financial downturns, everyone flees risky assets for safe ones. Bitcoin is like the diametric opposite of “safe”, but who knows what else might happen.
Bought Bitcoin beginning in 2013, so I’ve been through the 2013 bubbles, the 2014-2015 bear market, and the current run up.
With the huge run-up this year, it’s definitely risky. No one knows where the “top” might be, it could hit 5k before the bubble cracks, and then the end of downtrend would also be tough to estimate. Or conversely, the top may have been earlier today, and the downtrend is beginning.
There will eventually likely be a time to buy in the future, when prices are stable-ish for a long period of time, but who knows what price level that might be at. Back in 2013 we had the double whammy of China going very restrictive on Bitcoin, combined with the failure of the biggest exchange (the run-up in 2013 is generally considered artificial and was caused in part by a bot on that failed exchange). Nowadays, there are over a hundred different exchanges, and a failure by even the biggest ones will not cause problems like it did back then.
Personally, I think Bitcoin could eventually hit 5 figures over the next decade, if not sooner. This is a conservative estimate by at least a significant minority in the community however.
I don’t think anyone knows how Bitcoin would perform in a recession, since it wasn’t around during the last major one. Basis strict supply vs demand however, I still don’t think we’ve scratched the surface on global interest, and with about 75-80% of all available Bitcoins already mined, the long-term trend seems plausible to eventually continue. But in the meantime, some significant pain is very possible for those that throw in cash that they “can’t afford to lose” and start panicking at the first sign of a crash or bear market.
I haven’t looked at Bitcoin from a forex speculation/investment perspective.
What are the fees and processes to buy, say, USD1000 worth of Bitcoin or to convert that back to USD some other day? How reliably (absent a crisis) can you convert each way? How much delay; minutes or days?
Using Coinbase as the example (mentioned above), their fee structure is given here: https://support.coinbase.com/customer/portal/articles/2109597
So, you can lock in a Bitcoin price now by executing a purchase, and then assuming you used a bank account, you would receive your Bitcoin in several business days. You can then sell anytime to lock in a price, and receive the cash in your bank account within a few business days. It may be quicker/different if you use a debit or credit card.
An alternate faster method would be to fund your GDAX account (which is Coinbase’s exchange, and you can transfer anything between GDAX and Coinbase instantly). It would still take a few business days to deposit the cash, but the fees may be lower (or zero, I’m not sure). On GDAX, you can then buy and sell directly at market prices, which avoids some of the additional Coinbase fees. Trading fees are around 0.25% if you place a market order (buy/sell now at current prices). If you place a limit order (place an order and wait for someone else to buy/sell your offer/ask, there is zero fee).
Transfers from GDAX or Coinbase in crypto (Bitcoin, Ethereum, and Litecoin) to an actual wallet are generally quick, and primarily based on the coin’s network. Transfers from GDAX or Coinbase in cash are constrained by the various banking networks.
On Friday, I made a transaction which is still unconfirmed on this Monday. Is it possible for a transaction to remain in limbo indefinitely? Is it possible to cancel a transaction?
If the fee is too low, and it doesn’t go through, it will eventually time out and be returned (usually a couple of days).
Thanks.
We’re several days later and the transaction confirmed and the bitcoins haven’t been returned. The vendor hasn’t sent me a “payment received” email though. Is it possible for bitcoins to just get lost in the ether?
Sorry for the delay. They won’t get lost, but any number of things can happen. I’m not really a blockchain expert though. Can you post the transaction ID? If the transaction confirmed though, the receiver (or at least the address you sent them to) definitely got them.
Thanks for your response. I was worried about my thread getting lost too.
They got them and the shipment is on the way.
I’m curious to know what you think will happen to the price of Bitcoin these days.
As the August 1st UASF date gets closer, I think uncertainty will increase, so if it actually goes ahead (overall support seems to be a bit lean though at this time) I would expect some decrease ahead of it as people pull their coins off exchanges to make sure they get both pre- and post-split coins. Unless exchanges announce plans to handle both chains (which is probably more likely), but I would still expect some decrease due to the uncertainty of the UASF. After August 1st, it would be tough to say if there is an actual split (and not just one chain dying off), but if successful (the lesser chain just dies off) I would expect it to begin increasing again. If the UASF is avoided or abandoned due to lack of support, not really sure what will happen, it may tread water for awhile.
That said, we seem to be due to for a correction and a consolidation at at least slightly lower levels. If some bad news comes across though (which would always be unexpected), a downtrend may begin. The 2013 bubble was initially stopped by China surprisingly going into strong regulation mode (not banning Bitcoin, but strongly restricting usage). The Mt Gox scenario kept the downtrend going (and in retrospect was likely a significant cause of the bubble in the first place…i.e. it was not a natural bubble).
I think the current uptrend is more organic growth caused by increasing demand, though probably not as much as the current price shows. However, the correction over the past 7-10 days was pretty good from a technical standpoint, and the correction low ($1800-2000 USD) may well be a strong support area on any future medium term downtrend. If or when that’s going to happen, no one knows.
Alternative theory: The altcoin bubble has continued, with many alts at or near all-time highs, and BTC “dominance” near all-time lows. This may be partly due to uncertainty regarding the blocksize/segwit debate. Once this debate gets solved (and I strongly believe it will at some point), or if the UASF activates successfully, or the altcoin bubble deflates for another reason, traders may go back to trading BTC (instead of holding their bags on alts). Frankly, the altcoin boom has been a money-making machine for the past 2-4 months, so the current BTC run-up may be at least partly due to traders effectively keeping their BTC off the BTC/USD market, thus “constraining” supply. This is another scenario in which the BTC price may actually decrease as well.