Grant Sabatier, the founder of the personal finance blog Millennial Money, achieved financial independence by the age of 30. As Bitcoin surged in value in 2017, he quickly became a Bitcoin millionaire. However, despite his success, Grant advises against investing in Bitcoin today.
Back in 2013, Sabatier invested $5,000 in Bitcoin when the price was just $72 per Bitcoin. He had been aware of it since 2011 but only decided to invest after watching a documentary and exploring crypto forums. At the time, he viewed it as a long-term investment, putting less than 1% of his net worth into Bitcoin. By 2017, Bitcoin had soared to $18,000, turning his investment into over $1 million. What took him five years of work to save through stock market investments, he earned in less than a year with Bitcoin. Yet, despite this windfall, he still warns against investing in Bitcoin now.
Bitcoin’s Value is Unpredictable
Bitcoin is currently experiencing a global frenzy, but its value is highly unstable. Prices can fluctuate by 20-30% in a single day, making it impossible to accurately assess Bitcoin’s worth. This volatility makes Bitcoin more of a gamble than a stable investment, as you could lose your entire investment quickly.
Bitcoin Could Lose Its Value
The value of Bitcoin is based on the blockchain technology, which can easily be replicated by other cryptocurrencies with better systems and usability. Many newer cryptocurrencies offer more advanced and user-friendly features, and Bitcoin’s reliance on hype rather than technological value makes it seem more like a speculative bubble than a sustainable asset.
High Risk of Security Issues
Another major concern for Grant is the security risks associated with Bitcoin. Cryptocurrency exchanges and wallets are frequently hacked, with even major platforms like Coinbase not immune to breaches. Bitcoin is not insured by any government or regulatory body, meaning if your funds are stolen, it’s extremely difficult to recover them. This makes investing in Bitcoin a significant security risk.
Grant Sabatier’s Advice
Grant warns that if you still choose to invest in Bitcoin, limit your exposure to no more than 1% of your total assets. Be honest with yourself: Bitcoin is more of a gamble than an investment. It carries extreme risks, and there are safer, more reliable investment options available in the market today, both in the short and long term.
