Investors constitute a very heterogeneous group of people who apply very different strategies. Among other aspects, these can be based on solid knowledge, previous personal experiences, common sense and even envy. Currently, many of those who invest for the last two reasons and do not properly assess the risk incurred have recently acquired bitcoins or another cryptocurrency.
Their common sense leads them to think that, in terms of investment, the future is a repetition of the past. Therefore, if until now the bitcoin has risen a lot, in the next times it will do it again and it will do it in a similar percentage. Since in 2017 its quotation was revalued by 1,490.13%, in 2018 they have the expectation of obtaining spectacular profits. It is such a common and erroneous belief that the CNMV obliges the entities that sell investment funds to put the phrase "Past returns do not guarantee future ones".
Those who have bought bitcoins driven by envy have done so because they know relatives, friends or co-workers who are making a lot of money with the cryptocurrency. Almost every time they see them, they indicate their high and growing earnings, as well as how easy and fast it has been to obtain them. If they do not imitate them, they have the feeling that they are playing the fool, because they are missing out on a great opportunity.
To the latter, I want to offer you two tips. The first is that the real gains are those obtained with the sale of the asset. If they have not yet sold the bitcoins, what they are getting are potential capital gains. Given the high volatility of the price of cryptocurrencies, they can disappear almost overnight. The second is that in this country almost nobody tells what they have lost and what they have done; instead, many scatter to the four winds and exaggerate their gains.
From my perspective, cryptocurrencies have many virtues for their owners. Among them, the great security that blockchain technology offers to online transactions, acceptance in the purchase of an increasing number of assets, goods and services, and the existence in the case of bitcoin of a maximum number of units (21 million) stand out ).
However, I have great doubts that the digital currencies of the next decade, which will complement the conventional currencies, are the current cryptocurrencies. The rapid improvement of the technology induces me to think that a new one will appear that will replace the blockchain. If this happens, the bitcoin could disappear and deny that, due to its limited supply, is the gold of the 21st century, as some analysts say.
At present, its usefulness as a currency is scarce. Its high volatility prevents it from being considered a good deposit of value and hinders its acceptance similar to that of conventional currencies in the purchase of assets, goods and services. In the past year, bitcoin had daily increases and decreases of more than 30%, an aspect that caused a floor whose sale value was encrypted in that currency will quickly go from being a bargain to being overvalued, and vice versa.
The above reasons, coupled with the lack of support from any central bank and the growing supply of similar cryptocurrencies, lead me to believe that a large speculative bubble has formed around bitcoin. Its current value is only based on the high confidence of investors in its future, a characteristic that it now possesses and can evaporate tomorrow. Not even has the agricultural value that tulip bulbs had in seventeenth-century Holland (one of the first bubbles in history).
In short, if you have bitcoins and make money with them, do not think twice: sell them. If you do not have them, believe me that the more an asset based on an intangible asset (trust) is worth, the more expensive it is. Therefore, less chance has to go up and more to lower your quote.