▶ Coinbase Website: Coinbase.com
▶ CEX Website: cex.io
Let’s discuss the merits of Bitcoin vs. Pokémon Cards and what factors you should consider before investing in either of them. Get 4 Free Stocks with Robinhood until 2/1/2021 ➭
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What I concluded was that, well, they are pretty different investments altogether, it’s hard to compare them, And that got me thinking… HOW WOULD I EVALUATE A SPECULATIVE INVESTMENT, because, that’s really what this is all about.
In my opinion, a good speculative investment:
Has a good risk/reward ratio, that means the potential upside of your risky play might work out for you in the future by 10x, 20x, with a semi lower risk of ruin.
Is liquid.
Fairly valued – we need to make sure we’re not overpaying for an investment, good investments are usually bought at a good price, and the value of the underlying asset needs to be considered – the underlying value needs to increase slowly over time.
How does an asset’s underlying value increase slowly over time? Well I’d argue it needs to be in demand. So as long as the demand for that underlying asset is there, the value of it will grow slowly.
So Bitcoin is a volatile investment, we should know that from it’s price history and action.
While it is a risky proposition due to its volatility, I would actually argue its potential for 10x or 20x’ing is definitely there. In fact, many people who bought in around the $1,000 mark have already seen returns of 20-40x!
The other great thing about Bitcoin is that with the advent of new coin exchanges such as Coinbase, you’re literally able to buy and sell Bitcoin whenever you want, and if you ever needed to liquidate your Bitcoin for cash, you could do that pretty easily. So it’s also liquid. So for a speculative investment, that’s good.
Liquidity is important for speculative investments because in a downturn, you might have to get out ASAP – so this is an added benefit that bitcoin has and honestly, i’m not sure how to value liquidity, its one of those intangibles that you’re going to have to assess for yourself on it’s importance to you.
In terms of maintaining its fair value, I would argue that the market for Bitcoin is definitely large, and the supply of 18.5 Million of them is actually quite small for how big the market is.
Pokemon Cards are different:
People buy Pokemon Cards due to mostly emotion and nostalgia, and a lot has to do with emotional and sentimental value.
You don’t get that with Bitcoin, no one is sitting at their house looking at their Bitcoin wallet being like, “oh MR BITCOIN HOW I HAD SUCH GREAT MEMORIES WITH YOU’, NO, they just want to sell that S*** and get on their way.
The other difference is that knowledge really plays a factor in if its a good investment or not. By having a ton of knowledge of where the cards come from, what set they belong to, how rare a card is, that information could be pivotal for an expert Pokemon card collector and investor compared to a novice one.
The more knowledge you have in this space, the better investor you can become because you can identify undervalued and overvalued items. Bitcoin on the other hand, theres not much to learn other than well, it’s a digital currency.
▶️ My name is Humphrey Yang, I’ve built multiple businesses and am passionate about Personal Finance. If you’re trying to build a solid foundation of financial literacy, learn to invest, or become financially free – then I’m here for you! This channel cover topics like getting out of debt, managing money, building credit, multiple income sources, passive income, etc.
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▶ Coinbase Website: Coinbase.com
▶ CEX Website: cex.io
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