It’s no secret that Bitcoin has become one of finance’s hottest topics, surging in popularity over the past year and taking investors’ breath away with each dramatic rise and fall of its value.
Pretty crazy for a digital currency system that everyone agrees is still in its developmental phase. Bitcoin has come a long way in its nearly 10-year existence: The cryptocurrency began in the midst of the 2008 Great Recession, when an anonymous founder known online as Satoshi Nakamoto authored a technical paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.”
Despite its trendiness, many in the banking industry — along with a number of financial experts — has shown a real aversion to Bitcoin. Among them has been money expert Clark Howard, who has taken on a considerable amount of flak for his refusal to hop on the cryptocurrency bandwagon.
This is how Clark feels about Bitcoin
Clark has consistently stressed caution when consumers have asked about investing in cryptocurrencies.
“That’s because I have said all along that these are not real forms of money,” he says. “If they were real forms of money, there would be stability in their price.”
He says that regardless of its popularity, Bitcoin has not yet become legitimized and by definition it does not have the primary and most trusted characteristic of currency.
“The reality is that real money can be used to buy real things routinely and has stability in its value and the cryptocurrencies don’t,” he says. “That’s why they are a strictly speculative endeavor.”
Should you join the Bitcoin frenzy?
So, should you go crypto? While the roller coaster may be fun to ride, cryptocurrencies still have a ways to go before they can be seen as dependable alternatives to the dollar, Clark says. But for those who are adventurous with their money, he offers this definitive warning:
“So you want to buy this stuff because it’s fun, you want to buy this stuff with money you don’t care if you lose? Fine, and if you hit a big score, fine again, but just remember what money is,” he says. “It’s a method respected by others to buy and sell goods and services…and every cryptocurrency fails that test because there is not transparency, there’s not normal liquidity, and there’s not stability.”
Listen to Clark Howard talk about Bitcoin: