I invested in Bitcoin for a week and it was terrifying - Bring Me The News

I invested in Bitcoin for a week and it was terrifying

I haven't lost money, but I did lose sleep.

I'm not a gambler.

Find me at the roulette table in Vegas and I'm the one placing $2 bets while everyone else is throwing down hundreds. I fear losing far more than I hope to win.

So it was with trepidation last week that I decided to dabble in Bitcoin, the digital currency known for being one of the most volatile investments.


What you need to know about Bitcoin

It hit the headlines recently when the value of a single Bitcoin surged past $11,000, capping a meteoric rise for a cryptocurrency that just a year ago was worth $731.

It was at this point, that I rather unwisely decided to jump on the bandwagon, becoming one of those Bitcoin "noobs" roundly mocked by longer-term investors online.

How I did it

I set up a Coinbase account and bought $250 worth of Bitcoin, and $75 worth of Litecoin, its smaller-value competitor.

Unfortunately, I bought in when Bitcoin was valued at $10,900 and Litecoin at around $95. Within the space of a few hours, my $325 outlay was worth $240 as values plunged.

Like I said before, I'm a jittery gambler, and though I only invested a relatively small amount, the sudden drop in value still made my stomach roil.

What followed over the next week was a rollercoaster of emotions as Bitcoin continued to fluctuate wildly from minute to minute.

As of today (Dec. 5) I'm actually in the black. My Coinbase account shows my investment is now worth $335 – a gigantic gain of $10.

It could well be that passing the $11,000 mark was just the start of an even bigger rise for Bitcoin, as it becomes more recognized by the financial services industry and attractive for investors.

But it remains a volatile investment. 

So what did I learn?

Though improvements in blockchain tech (which underpins digital currencies) could make online currency a more secure and widely used form of payment in the future, right now it's just not for me.

As one financial expert puts it: Don't invest in something you don't understand. 

I have a basic working knowledge of cryptocurrencies, but wider comprehension of its scope and scale eludes me.

Anyone thinking about investing in Bitcoin needs to know what it's all about, but more importantly go into it with eyes wide open. The risk of losing money is as real as the chance of gaining it.

I might keep my money in there just on the off chance it explodes again, but my IRA and personal savings are holed up in longer-term investments.

While the ceiling for these are lower, the floor is higher, and I prefer not to gamble with my financial future.

The Tip Jar is consumer writer Adam Uren's advice column on how to spend, save, and live with confidence. Read past columns here.

Next Up